Meal trays assembled by airlines were not branded edible preparations at the supplier's end; extended limitation also failed.

Meal components supplied to airlines in trays, bowls and pouches were not, on these facts, branded edible preparations manufactured at the supplier's end, because the airline assembled them only for onboard service and the brand label was kept in a separate cutlery pouch. The classification adopted by Revenue was therefore not justified, and the demand failed on merits. The extended period of limitation was also unavailable because the dispute involved legal interpretation, with no evidence of fraud, suppression, wilful misstatement, or intent to evade duty. The duty demand and penalty were set aside, with consequential relief as permissible in law.

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Issues: (i) whether the complete meal tray supplied to airlines was classifiable as branded edible preparations liable to Central Excise duty; (ii) whether the demand could be sustained by invoking the extended period of limitation.

Issue (i): whether the complete meal tray supplied to airlines was classifiable as branded edible preparations liable to Central Excise duty.

Analysis: The food items prepared by the appellant were supplied separately in trays, bowls and pouches, while the airline staff assembled them for service on board. The brand label was placed in a separate cutlery pouch and was not attached to the food items when cleared from the appellant's premises. The demand was sought on the value of the entire meal tray as served to passengers, but the Revenue did not establish that such assembled tray emerged as a manufactured branded product at the appellant's end. In these circumstances, classification as branded edible preparations was not justified.

Conclusion: The issue is decided in favour of the assessee.

Issue (ii): whether the demand could be sustained by invoking the extended period of limitation.

Analysis: The dispute was one of legal interpretation concerning taxability of the catering activity. The record did not show fraud, suppression of facts, wilful misstatement or any intent to evade duty. The activity of catering to airlines was a known business activity, and the circumstances did not justify reopening the matter after a long lapse of time by resorting to the extended period.

Conclusion: The extended period of limitation was not available to sustain the demand.

Final Conclusion: The duty demand and penalty were set aside, and the appeal succeeded with consequential relief as permissible in law.

Ratio Decidendi: A meal supplied in constituent parts and assembled by the airline for service on board is not, without more, a manufactured branded edible preparation at the supplier's end; in the absence of suppression or intent to evade duty, the extended period of limitation cannot be invoked.

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