2004 (8) TMI 303 - AT - Central Excise

Summary

Issues:
Whether M/s. Buns & Cones Pvt. Ltd. and Sunny Deserts Pvt. Ltd. are engaged in the manufacturing of Ice-cream falling under Heading 21.05 of the Schedule to the Central Excise Tariff Act.

Analysis:
The appeals involved a common issue regarding the manufacturing of ice-cream by M/s. Buns & Cones Pvt. Ltd. and Sunny Deserts Pvt. Ltd. The dispute arose from the process undertaken by the appellants, which the Revenue claimed amounted to manufacturing under Note 7 to Chapter 21 of the Central Excise Tariff Act.

The learned Advocate argued that the blending of ice-cream with various flavors did not constitute manufacturing under Note 7. He emphasized that the ice-cream procured by the appellants was already marketable in 4-liter packs, and the subsequent blending process did not render it non-marketable. He cited relevant case law to support his position.

In response, the learned SDR reiterated the Revenue's stance that the process of blending and mixing flavors was necessary to make the ice-cream marketable to consumers. The emphasis was placed on the requirement that the product should be marketable not just in general but specifically to the consumer's preferences.

Upon consideration of the arguments, the Tribunal analyzed the wording of Note 7 to Chapter 21, particularly the phrase "adoption of any other treatment to render the product marketable to the consumer." The Tribunal agreed with the learned Advocate's interpretation that the ice-cream procured by the appellants was already marketable without the additional blending process. Drawing parallels to a previous case involving cosmetics, the Tribunal highlighted the significance of conferring marketability attributes that the product did not possess earlier.

The Tribunal concluded that the ice-cream obtained by the appellants was already in a marketable condition, and the blending process only enhanced its marketability without fundamentally changing its nature. Therefore, the Tribunal held that the activities of the appellants did not amount to manufacturing under Note 7 to Chapter 21. Citing precedent and the specific wording of the legal provision, the Tribunal set aside the impugned orders and allowed all the appeals.