1993 (7) TMI 196 - AT - Central Excise

Food Processing Not Manufacturing Under CESA 1944: Frozen Peas, Mango Pulp Classification Decision

MAFCO LTD. Versus COLLECTOR OF CENTRAL EXCISE, POONA

The Tribunal held that the processes involved in preparing frozen peas and mango pulp, such as cleaning, blanching, freezing, and packing, do not amount ... Manufacture Issues Involved:1. Classification and excise duty applicability on frozen peas.2. Classification and excise duty applicability on mango pulp.3. Classification and excise duty applicability on shelled corn.4. Determination of whether the processes involved amount to manufacture under Section 2(f) of the CESA, 1944.5. Applicability of specific Central Excise Tariff Headings to the products in question.Issue-wise Detailed Analysis:1. Classification and Excise Duty Applicability on Frozen Peas:The appellants argued that the process of preparing frozen peas does not amount to manufacture as defined under Section 2(f) of the CESA, 1944. They contended that the peas are merely cleaned, blanched, preserved by freezing, and packed, and thus remain as peas. The Department, however, classified frozen peas under Heading 2001.10, arguing that the processes involved, such as blanching and freezing, constitute preparation and therefore manufacture. The Tribunal agreed with the appellants, stating that the processes do not change the character of the peas, and thus do not amount to manufacture.2. Classification and Excise Duty Applicability on Mango Pulp:The appellants contended that the process of preparing mango pulp, which includes peeling, pulping, and adding sugar and citric acid, does not amount to manufacture. They argued that the mango pulp remains mango pulp after these processes. The Department classified mango pulp under Heading 2001.10, asserting that the processes involved result in a prepared product. The Tribunal agreed with the appellants, stating that the mango pulp remains the same product and does not result in a new product with a different name, character, or use. Thus, the process does not amount to manufacture.3. Classification and Excise Duty Applicability on Shelled Corn:The appellants argued that shelled corn, which is merely shelled and preserved, does not amount to manufacture. The Department classified shelled corn under Heading 2107.91. The Tribunal found that the details of the processes involved were not sufficiently provided by either side, making it difficult to determine if the processes amounted to manufacture. The Tribunal set aside the duty demand on shelled corn and remanded the matter for de novo consideration.4. Determination of Whether the Processes Involved Amount to Manufacture:The Tribunal emphasized that for a process to constitute manufacture, it must result in a new product with a different name, character, or use. The processes of cleaning, blanching, freezing, and packing frozen peas and mango pulp were found not to result in such a change. Therefore, these processes do not amount to manufacture under Section 2(f) of the CESA, 1944.5. Applicability of Specific Central Excise Tariff Headings:The Tribunal analyzed the applicability of various tariff headings. For frozen peas, the Tribunal held that they should not be classified under Heading 2001.10 as they are not a manufactured product. For mango pulp, the Tribunal found that it should not be classified under Heading 2001.10, as the processes do not amount to manufacture. For shelled corn, the Tribunal remanded the matter for further consideration due to insufficient details on the processes involved.Separate Judgments:One judge dissented, arguing that the processes involved in preparing frozen peas and mango pulp do amount to manufacture and should be classified under Heading 2001.10. This judge emphasized that the processes, particularly blanching, result in changes to the products, such as enzyme destruction and taste alteration. However, the majority opinion prevailed, and the appeal was accepted, setting aside the duty demands on frozen peas and mango pulp, and remanding the matter of shelled corn for further consideration.