Manufacture test for scented supari defeated excise valuation under MRP-based assessment once the process was found non-manufacturing.

Scented supari was considered in light of the Supreme Court's ruling that crushing betel nuts into smaller pieces and sweetening them with oils, menthol and similar agents does not amount to manufacture. Once the process was held not to be manufacture, no excise duty liability survived, and the valuation question under Section 4 or Section 4A of the Central Excise Act, 1944 became irrelevant. On that basis, assessment under Section 4A was found unsustainable and the impugned order was set aside in favour of the assessee.

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Issues: Whether scented supari was to be assessed under Section 4A of the Central Excise Act, 1944 on the basis of MRP declared on multi-piece packages or under Section 4 of the Central Excise Act, 1944, in view of the finding that the process undertaken did not amount to manufacture.

Analysis: The appellant's own case had already been decided by the Supreme Court, which held that crushing of betel nuts into smaller pieces and sweetening them with oils, menthol and other agents does not amount to manufacture. Once the process was not manufacture, no excise duty liability survived, and the question whether valuation should proceed under Section 4 or Section 4A ceased to have relevance.

Conclusion: The assessment under Section 4A was not sustainable in the present appeal; the valuation dispute under Sections 4 and 4A did not survive, and the impugned order was set aside in favour of the assessee.

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