Excise duty on airline meal trays fails absent proof of manufactured product and suppression for extended limitation.

Food trays supplied to airlines were analysed as separate components prepared independently, with final assembly done by airline staff on board; on that basis, the complete meal tray was not shown to emerge from the assessee's premises as a branded manufactured product, so excise duty on the assembled tray was not sustainable. On limitation, the dispute involved legal interpretation and the record did not establish fraud, suppression of facts, or wilful misstatement with intent to evade duty; accordingly, the extended period could not be invoked and the demand was time-barred. The impugned order was set aside and relief followed.

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Issues: (i) Whether the food trays supplied to airlines were liable to central excise duty as branded food preparations on the footing that the complete meal tray emerged as a manufactured excisable product; (ii) whether the demand was barred by limitation and the extended period could be invoked.

Issue (i): Whether the food trays supplied to airlines were liable to central excise duty as branded food preparations on the footing that the complete meal tray emerged as a manufactured excisable product.

Analysis: The food items such as roti, rice, curry and other components were prepared and supplied separately, while the final assembly of the tray was done by airline staff at the time of service on board. The label bearing the caterer's name and logo was placed in a separate cutlery pouch supplied independently, and the Department did not establish that the complete meal tray, as cleared from the appellant's premises, emerged as a branded manufactured product. The demand on the full value of the assembled tray was therefore unsupported on the question of manufacture and taxability.

Conclusion: The issue was decided in favour of the assessee and against excisability of the complete meal tray.

Issue (ii): Whether the demand was barred by limitation and the extended period could be invoked.

Analysis: The dispute was one of legal interpretation, and there was no substantial evidence of fraud, suppression of facts or wilful misstatement with intent to evade duty. The activity of catering to airlines was well known, and the facts did not justify invocation of the extended period for a demand raised after a long lapse of time.

Conclusion: The demand was held to be time-barred and the extended period was not sustainable.

Final Conclusion: The impugned order was set aside and the appeal succeeded with consequential relief according to law.

Ratio Decidendi: A complete meal tray is not liable to excise duty unless the Department establishes that a taxable manufactured product emerges from the assessee's premises, and the extended period of limitation cannot be invoked in the absence of evidence of suppression or intent to evade duty in a matter involving legal interpretation.

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