Manufacture by processing chicory roots confirmed, exemption denied, and duty recovery limited prospectively after departmental representation.

Roasting and grinding chicory roots with power was treated as manufacture because the process produced chicory powder, a new and commercially marketable commodity distinct from the raw root, bringing it within Tariff Item 68. Chicory powder was not accepted as a food product or food preparation for exemption purposes, since in ordinary commercial sense it is used as an additive to coffee rather than consumed as food or beverage. Recovery of duty for the period before the show cause notice was not justified where the assessee had relied on an earlier departmental communication treating the product as duty-free; duty could be demanded only prospectively from the notice date.

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Issues: (i) whether roasting and grinding chicory roots with the aid of power results in manufacture of a new and distinct commercially marketable commodity liable to duty under Tariff Item 68; (ii) whether chicory powder is exempt as a food product or food preparation under Notification No. 55/75-C.E. dated 1-3-1975; and (iii) whether the demand for duty could be enforced for a period prior to the show cause notice after the Department changed its stand.

Issue (i): whether roasting and grinding chicory roots with the aid of power results in manufacture of a new and distinct commercially marketable commodity liable to duty under Tariff Item 68.

Analysis: Roasting and grinding chicory roots converts the raw material into chicory powder, which is a different commercially marketable product from chicory roots. The process brings about a new commodity fit for sale in that form, and therefore answers the statutory concept of manufacture under the Central Excises and Salt Act.

Conclusion: The process amounts to manufacture and the resultant chicory powder is classifiable under Tariff Item 68.

Issue (ii): whether chicory powder is exempt as a food product or food preparation under Notification No. 55/75-C.E. dated 1-3-1975.

Analysis: The expressions in the exemption notification are to be understood in their ordinary commercial sense. Chicory powder is not consumed by itself as food or beverage, but is used as an additive or adulterant to coffee for taste and flavour. It does not answer the description of a food product or food preparation within the notification.

Conclusion: The claim to exemption under Notification No. 55/75-C.E. failed.

Issue (iii): whether the demand for duty could be enforced for a period prior to the show cause notice after the Department changed its stand.

Analysis: The appellants had acted on the Collector's communication stating that the chicory powder was free of duty, and thereafter ceased payment. In the peculiar facts, and in view of the earlier departmental position, recovery for the period preceding the show cause notice was not justified, though duty could be demanded prospectively from the date of the notice.

Conclusion: Duty could be recovered only from the date of the show cause notice and not for the earlier period.

Final Conclusion: The common ruling upheld dutiability and denial of exemption, but restricted recovery prospectively from the show cause notice, resulting in dismissal of one appeal and partial allowance of the other.

Ratio Decidendi: A process that transforms a raw material into a new commercially marketable commodity is manufacture, ordinary commercial meaning governs exemption notifications absent a statutory definition, and retrospective recovery is not justified where the assessee acted on an earlier clear departmental representation and no fresh basis for a contrary demand was shown.

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