2026 (2) TMI 121 - AT - Central Excise

Roasting of Rava/Suji: moisture reduction by single or double roasting held not to constitute manufacture, so no excise levy applies.

Whether subjecting plain rava/suji to single or double roasting constitutes 'manufacture' under the definition applicable to excise was contested; the ... Manufacture - Rava/Suji - roasting at an appropriate temperature 60 - 80% resulting into reduction in the moisture content - definition of manufacture under Section 2(f) of the Central Excise Act, 1944 - HSN Explanatory Note - change in character, use or marketability test - Whether Rava/Suji after being subjected to the process of ‘Single Roasting’ or ‘Double Roasting’ results into ‘manufacture’ and consequently the resultant product attract classification under Chapter Heading 1901 of Central Excise Tariff Act, 1985 as ‘food preparation’. - HELD THAT:- In the case of Commissioner of Central Excise, Mumbai – IV vs. Fitrite Packers [2015 (10) TMI 1047 - SUPREME COURT] observed that processing of conversion of wheat into ‘single roasted Rava’ or ‘double roasted Rava’ amounts to ‘manufacture’. Following the same, the Rava/Suji itself is a finished product falling under Chapter 1103 ready to be used and sold in the market; the process of ‘single roasting’ or ‘double roasting’ of Rava does not bring any change in the item itself nor any change in its physical properties/characteristics, only the process of roasting reduces the moisture content of Rava/Suji. Plain Rava/Suji when subjected to first roasting and/or second roasting, no transformation takes place nor the resultant roasted product having an altogether distinct character and use; similarly to the process of repeated sterilisation as held in the above case, every time Rava/Suji is roasted i.e. either first time or second time or thereafter would not bring out any new commodity so as to make the process of roasting/ heating as ‘manufacture. Therefore, the finding of the learned Commissioner that the process of roasting i.e. ‘single roasting’ and/or ‘double roasting’ of the plain Rava/Suji resulted into manufacture, in our opinion, cannot be sustained. Since, we have come to the opinion that the process of roasting undertaken by the appellant does not result into manufacture, further discussion about change in its classification becomes academic, hence, not dealt into. Thus Rava/suji when subjected to the process of roasting does not result into “manufacture” within the definition of Section 2(f) of Central Excise Act, 1944, hence, not leviable to excise duty. In the result, the impugned order is set aside and the appeals are allowed with consequential relief, if any, as per law. Issues: Whether Rava/Suji subjected to single or double roasting (drying/heating reducing moisture) amounts to 'manufacture' within the meaning of Section 2(f) of the Central Excise Act, 1944 and thereby becomes classifiable as a food preparation under Chapter Heading 1901 of the Central Excise Tariff Act, 1985.Analysis: The product Rava/Suji is admitted to be a finished granular product classifiable under Chapter Heading 1103. The processes of drying and roasting described reduce moisture content (from about 14.5% to 11-12% for single roasting and to 6-8% for double roasting) without producing a new commodity or altering the essential character, physical properties or end-use of Rava/Suji. Application of the categorical tests used for determining 'manufacture' distinguishes processes that merely remove foreign matter or effect minor changes from processes that transform goods into a new, marketable article. The roasting/drying here falls within the category where the article remains essentially the same and continues to be marketable as Rava/Suji; no value-adding transformation creating a distinct product sold in the market arises. Reliance on classification and explanatory notes for Chapter 11 supports that semolina/sooji falls under Heading 1103 and that roasting per se does not convert it into a Chapter 1901 'food preparation'.Conclusion: The process of single or double roasting/drying of Rava/Suji does not amount to 'manufacture' under Section 2(f) of the Central Excise Act, 1944; therefore, the resultant product is not leviable to excise duty as a Chapter 1901 food preparation. Decision in favour of the assessee.