2019 (4) TMI 718 - AT - Central Excise

CESTAT Chennai: Betel nut processing not manufacturing; Section 4/4A inapplicable.

The Appellate Tribunal CESTAT CHENNAI set aside the impugned order and allowed the appeal, determining that the process of crushing betel nuts into ... Method of Valuation - Scented Supari - whether assessment to be made under section 4A of Central Excise Act, 1944 on MRP declared on the multi-piece packages or under section 4 of the said Act? - Held that:- The process of crushing of betel nuts into smaller pieces and sweetening the same with essential/non-essential oils, menthol, sweetening agents etc., does not amount to manufacture. Therefore, the issue whether section 4 or 4A has to be applied for arriving at the assessable value has no relevance for consideration in this appeal. The impugned order requires to be set aside - appeal allowed - decided in favor of appellant. Issues:Assessment of goods under Section 4 or 4A of the Central Excise Act, 1944.Analysis:The judgment by the Appellate Tribunal CESTAT CHENNAI addressed the issue of whether the assessment of Scented Suprari should be made under section 4A of the Central Excise Act, 1944, based on the MRP declared on the multi-piece packages or under section 4 of the said Act. The appellant's counsel argued that the process of crushing betel nuts does not amount to manufacture, citing relevant Supreme Court judgments. The Tribunal referred to a previous order and the Supreme Court's decision in the appellant's case, concluding that the issue of applying section 4 or 4A for arriving at the assessable value is irrelevant when the process does not amount to manufacture. The impugned order was set aside based on these findings, and the appeal was allowed with consequential benefits as per law.In the appellant's case, the Supreme Court had previously held that the process of crushing betel nuts into smaller pieces and sweetening them with various ingredients does not amount to manufacture. The Tribunal found no reason to deviate from this established precedent and noted that the Revenue did not present any new facts or developments warranting a different view. Consequently, the impugned order was set aside, and the appeal was allowed with any consequential benefits in accordance with the law. The judgment reaffirmed the principle that the process in question does not constitute manufacturing, rendering the application of section 4 or 4A for assessing the value of the goods irrelevant in this context.