Fresh manufacturing activity for sugar cess: granulated sugar conversion remained within the statutory definition and attracted levy again.

Conversion of sugar in small granules into larger grain sugar was treated as a fresh manufacturing activity for sugar cess purposes because the resulting goods were classified as sugar confectionery under Chapter Heading 1704.90 and were not shown to be merely ordinary sugar in a different form. The Tribunal held that the product was commercially distinct from sugar for market purposes, yet still fell within the statutory definition of sugar under the Sugar Cess Act, 1982, so cess was again attracted on the activity. The levy of sugar cess was upheld.

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Issues: Whether conversion of sugar in small granules into larger grain sugar amounted to a fresh manufacturing activity attracting sugar cess under the Sugar Cess Act, 1982.

Analysis: The Tribunal noted that the goods produced by the assessee had been classified as sugar confectionery under Chapter Heading 1704.90 and that the assessee had not established that the product was merely ordinary sugar in a different form. On that basis, it held that the product was distinct from sugar for market purposes, though it still fell within the statutory definition of sugar under the Sugar Cess Act, 1982, making the activity liable to cess again.

Conclusion: The levy of sugar cess was upheld and the assessee's challenge failed.

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