TaxTMI 
TaxTMI 
2026 (2) TMI 121
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.... are manufacturing single / double roasted Sooji / Rava packed in unit containers under the brand name of 'Pillsbury' but had not discharged duty on the same. It is alleged that the process of drying and roasting of Sooji / Rava carried out by them as per the demands from their customer M/s. General Mills India Pvt. Ltd. results into 'manufacture' and clearing the same without payment of duty is in contravention of various provisions of Central Excise Act, 1944 and the Rules made thereunder. Further, it is alleged that the process of single/double roast of Sooji/Rava and marketing it in unit containers fall under Chapter Subheading 19019090 of Central Excise Tariff Act, 1985, attracting duty and also Maximum Retail Price (MRP) based assessment under Section 4A of Central Excise Act, 1944 read with Notification No. 49/2008-CE (NT) dated 24.12.2008. Consequently, Central Excise duty of Rs.1,95,51,297/- was demanded for the period from 05.08.2010 to 31.10.2013 along with interest and penalty; penalty proposed against the Managing Director and Executive Director of the appellant-company. On adjudication, the demand was confirmed with interest and penalty; also, personal penalty imposed....
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....oisture content does not result into emergence of any new commodity, thereby rendering the said process as manufacture within the meaning of 'manufacture' under Section 2(f) of Central Excise Act, 1944. In support, he has submitted that roasting of oats has been held to be not a process of manufacture by the Hon'ble Supreme Court in M/s. Star Industries Commissioner of Customs (Imports), Raigad: [2015 (10) TMI 1288 SC]. He has also submitted that there is no legal fiction in the Chapter 11 by which roasting can be treated as amounting to 'manufacture', rather it includes roasted products as well viz., 'Malt, whether or not roasted', therefore, mere roasting of a product of Chapter 11 will not take it out of the said Chapter for classification purpose. Further, he has submitted that the process of roasting does not amount to manufacture as the essential characteristics of Rava, as such, has not been altered and the same continuous to be Rava even after 'single roasting' or 'double roasting'; no new commodity comes into existence by the process of drying or roasting of Rava. In support, they have referred to the decision in the case of M/s. Ishita Bakers Pvt. Ltd. Vs. CCE....
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....TR 308 (T)]. Consequently, imposition of penalty on the appellant as well as the Directors of the appellant-company under Rule 26 is not sustainable as the issue relates to interpretation of law relating to classification of the product in question. 4. The learned Authorised Representative (AR) for the Revenue reiterated the findings of the learned Commissioner. 5. Heard both sides and perused the records. 6. The limited issue involved in the present appeal for consideration is: 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'. 7. The processes undertaken by the appellant, which is claimed to be amounting to 'manufacture' by the Revenue, as narrated by the appellant in the statement of Smt. K.M.Sunitha dated 29.01.2013 is as follows: "Q. No. 3. What is the process of manufacture of roasted Sooji in the factory? A. Roasted Sooji is manufactured in the factory for M/s. General Mills India Pvt. Ltd. in M/s. Sunil Agro Foods Ltd. (Unit I) ....
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....ng- of 500 gms. pouch in the factory under the brand of Pillsbury Double Roasted Rava and the same are supplied to M/s. General Mills India Pvt. Ltd. At the time of supply to M/s. General Mills India Pvt. Ltd. proper invoices are raised from the factory. The aforesaid Pillsbury Rava and Double Roasted Rava are manufactured by us as per the finished goods specification given to us by M/s. General Mills India Pvt. Ltd. which are seized at page no. 120-132 of the file No. 6 of the Annexure III to the Mahazar dated 29-1-2013. Other than the above Single roasted and Double roasted Rava manufactured and supplied to M/s. General Mills India Pvt. Ltd, we are also manufacturing and selling Plain Rava (without Drying and roasting) under our Brand 'Sunil' in 50 Kg. bulk Pack. In this regard, I state that the Rava sold by us under our Brand name does not go through the processes like Drying and Roasting. These processes of drying and roasting are carried out as per the specific demand from M/s. General Mills India Pvt. Ltd. In this connection, I am also enclosing a copy of the Flow-chart showing the additional processes carried out on Rava like Drying, Roasting; cooli....
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....on of 'manufacture' as per Section 2(f) of CEA,1944. The claim of the appellant in the said case was that the activity of sterilization of syringes and needles does not amount to manufacture, as no new product comes into existence by merely sterilizing disposable syringes and needles which continue to be disposable syringes and needles post-sterilization. In the said context, the Hon'ble Supreme Court analysed the principles set out from time to time and reasoning recorded by the Hon'ble Apex Court relating to the interpretation and scope of definition of 'manufacture' under Section 2(f) of the Central Excise Act, 1944. The conclusion has been recorded at para 27 which reads as below: "27. The case law discussed above falls into four neat categories. (1) Where the goods remain exactly the same even after a particular process, there is obviously no manufacture involved. Processes which remove foreign matter from goods complete in themselves and/or processes which clean goods that are complete in themselves fall within this category. (2) Where the goods remain essentially the same after the particular process, again there can be no manufacture. This is ....
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....iable to be paid on such instruments five times over on any given day of use. Further, what is to be remembered here is that the disposable syringe and needle in question is a finished product in itself. Sterilization does not lead to any value addition in the said product. All that the process of sterilization does is to remove bacteria which settles on the syringe's and needle's surface, which process does not bring about a transformation of the said articles into something new and different. Such process of removal of foreign matters from a product complete in itself would not amount to manufacture but would only be a process which is for the more convenient use of the said product. In fact, no transformation of the original articles into different articles at all takes place. Neither the character nor the end use of the syringe and needle has changed post-sterilization. The syringe and needle retain its essential character as such even after sterilization." 10. Applying the tests laid down in the above judgement to the case in hand, 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' ....