Tribunal rules on classification of Corn Flour under Central Excise Tariff

The Tribunal upheld the impugned order, rejecting the Department's appeal regarding the classification of Brown & Polson Corn Flour under the Central Excise Tariff sub-heading 1901.19. The Tribunal found that the activities of sieving, labeling, and repacking of maize starch into smaller packs did not amount to manufacture, based on previous tribunal decisions. As no manufacturing activity was deemed to have occurred, the goods were not subject to duty based on the selling price after repacking.

---

---

Issues: Classification of Brown & Polson Corn Flour under Central Excise Tariff sub-heading 1901.19

In this case, the main issue revolves around the classification of Brown & Polson Corn Flour under the Central Excise Tariff sub-heading 1901.19. The appellants, engaged in the manufacture of various products of Brown & Polson Corn Flour, claimed classification under Chapter sub-heading 1909.19, stating that the goods are re-packed from duty paid Maize Starch without any modification. The Department issued a show cause notice asking for an explanation as to why the product should not be classified under Central Excise Tariff sub-heading 1901.19. The appellants argued that repacking and labeling of maize starch does not amount to manufacture, citing a letter from the Additional Collector stating that Corn Flour should be treated as non-excisable. The learned Collector decided the issue in favor of the assessees, prompting the Department to appeal, contending that the reliance on a previous order was misplaced as it related to a different tariff item.

The Departmental Representative argued that the process of sieving, repacking in measured quantity amounts to manufacture, as the starch in gunny bags was not fit for human consumption until processed by the assessee. It was contended that the resultant product, corn flour, was a fit preparation used in various food items. On the other hand, the respondents' counsel argued that mere sieving, labeling, and repacking do not amount to manufacture, citing previous tribunal decisions supporting their stance. They argued that no manufacturing activity had taken place, and therefore, the order of the learned Collector (Appeals) was correct in law and on facts.

Upon considering the rival submissions, the Tribunal found that the issue of sieving, labeling, and repacking of maize starch into smaller packs had been previously addressed in tribunal decisions. The Tribunal consistently held that such activities do not amount to manufacture, even if a higher price is charged for smaller packs. As no manufacturing activity was found to have taken place, the goods were not chargeable to duty based on the price at which they were sold after repacking. Consequently, the Tribunal upheld the impugned order, rejecting the appeal filed by the Department.

---