Processed nuts fall under Chapter 20, and roasting plus repacking can amount to excise manufacture.

Processed nuts such as dry-roasted, oil-roasted, salted, seasoned and branded cashew nuts, peanuts and almonds were treated as preparations of nuts under Chapter 20, not edible nuts under Chapter 8, because the tariff structure and HSN notes specifically cover roasted or prepared nuts and exclude such goods from Chapter 8. The processes of roasting, salting, flavouring, repacking into unit containers and affixing brand names were also treated as manufacture because Section 2(f)(ii) and Chapter Note 3 deem specified labeling, repacking and marketable treatment processes to be manufacture for excise purposes, even without a traditional new commodity test.

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Issues: (i) Whether processed nuts and similar goods such as dry-roasted, oil-roasted, salted, seasoned and branded cashew nuts, peanuts and almonds were classifiable under Chapter 20 of the Central Excise Tariff Act, 1985 or under Chapter 8. (ii) Whether the processes of roasting, salting, flavouring, repacking into unit containers and affixing brand names amounted to manufacture under Section 2(f)(ii) of the Central Excise Act and Chapter Note 3 of Chapter 20.

Issue (i): Whether processed nuts and similar goods such as dry-roasted, oil-roasted, salted, seasoned and branded cashew nuts, peanuts and almonds were classifiable under Chapter 20 of the Central Excise Tariff Act, 1985 or under Chapter 8.

Analysis: The classification dispute was resolved by applying the tariff structure together with the Harmonised System of Nomenclature, which is a recognised guide for tariff interpretation. The explanatory notes to Chapter 20 specifically cover nuts such as almonds and groundnuts when dry-roasted, oil-roasted or fat-roasted, and Chapter 8 excludes roasted groundnuts and similar prepared nuts. The goods, having undergone the processes described, answered the description of preparations of nuts under Chapter 20 and not of edible nuts in Chapter 8.

Conclusion: The goods were classifiable under Chapter 20, not Chapter 8, and this issue was decided in favour of Revenue.

Issue (ii): Whether the processes of roasting, salting, flavouring, repacking into unit containers and affixing brand names amounted to manufacture under Section 2(f)(ii) of the Central Excise Act and Chapter Note 3 of Chapter 20.

Analysis: Section 2(f)(ii) expands manufacture to include processes specified in the section or chapter notes of the Tariff Act as amounting to manufacture. Chapter Note 3 of Chapter 20 treats labeling, relabelling, repacking from bulk to retail packs, and other treatment rendering the product marketable as manufacture. The processes undertaken by the assessee fell within this deeming framework, and the Court treated the statutory definition as controlling over the traditional test of emergence of a new commodity. The earlier precedents relied upon by the Revenue supported the proposition that such statutorily specified processes are manufacture for excise purposes.

Conclusion: The processes amounted to manufacture for excise purposes, and this issue was decided in favour of Revenue.

Final Conclusion: The tariff classification and excisability of the processed nuts were upheld under Chapter 20, the Revenue's appeal succeeded on the principal issue, and the connected matters were disposed of accordingly, with one set of connected appeals remanded only on the limited question of penalty and interest.

Ratio Decidendi: For excise tariff purposes, processed nuts that are dry-roasted, oil-roasted or otherwise prepared and packed as branded unit goods fall within Chapter 20, and where the statute or chapter notes deem specified processes to be manufacture, those processes are excisable manufacture notwithstanding the absence of a traditional transformation into a new commodity.

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