2015 (10) TMI 2400 - AT - Central Excise

Appeals allowed due to time limit. Issue of manufacturing activity remains unresolved.

Taj Sats Air Catering Ltd., Manish Chiranewal, Oberoi Flight Services, G Srinivasan, Sky Gourmet Air Catering Pvt. Ltd. & G.P Chaturvedi Versus Commissioner of Central Excise, Mumbai I

Taj Sats Air Catering Ltd., Manish Chiranewal, Oberoi Flight Services, G Srinivasan, Sky Gourmet Air Catering Pvt. Ltd. & G.P Chaturvedi Versus ... Issues Involved:- Whether the activity of assembling food items in trays by flight caterers amounts to manufacture.- Whether the goods supplied can be considered as branded goods.- Whether the extended period of limitation is applicable in this case.Analysis:Manufacture Issue:The appellants argued that assembling food items in trays does not amount to manufacture. They cited various case laws to support their contention. They emphasized that the meal comes into existence after clearance from their premises and any manufacturing activity occurs during the flight by cabin crew. The appellants also disputed the classification of the trays as edible preparations with a brand name under a specific tariff heading. The Tribunal noted that the adjudicating authority did not provide findings on whether the activity constituted manufacture. It held that mere classification under a heading does not automatically imply manufacturing. The Revenue needed to prove that the activity met the criteria set by the Supreme Court for manufacturing, which was not done in this case.Branding Issue:The dispute also revolved around whether the goods supplied were branded. The Revenue argued that even though individual items were not labeled, the presence of a card with the caterer's name on the cutlery pack implied branding. The Tribunal agreed, stating that passengers associated the meals with the caterer, making them branded goods. It referenced a Supreme Court judgment to support this conclusion.Extended Limitation Issue:Regarding the extended period of limitation, the appellants contended that there was no suppression of facts or intention to evade duty as they were registered with the department and engaged in catering services openly. The Tribunal found it hard to establish willful misstatement or fraud, given the appellants' regular payment of excise duty on other items and their known business of catering to airlines. Consequently, it ruled that the extended limitation period was not applicable in this case.Conclusion:The Tribunal allowed the appeals as all demands were beyond the normal limitation period. It kept the issue of whether the activity amounted to manufacture open, as the adjudicating authority had not provided a clear decision on this matter. The judgment was pronounced on 10/08/2015.