RUKMANI PAKKWELL TRADERS Vs. COMMISSIONER OF CENTRAL EXCISE

JUDGEMENT

(1.) THIS appeal filed by the assessee is against a demand of duty on 'scented supari' for the period 01.04.1995 to 25.09.1995. The above product resulted from the activity of cracking of betelnut followed by roasting, coating with oil and addition of sweetening and flavouring agents. This activity was undertaken by one M/s. ARR Enterprises, from whom the assessee purchased the product in bulk and repacked and marketed. The assessee considered the repacked product to be not excisable as, according to them, the above activity did not amount to 'manufacture' as defined under Section 2(f) of the Central Excise Act. However, they were constrained to file a classification list classifying the products under SH 2106.90 under protest in May, 1994. The department did not accept their protest and hence issued a show -cause notice to vacate it. They issued a second notice demanding duty on the above item by classifying it under SH 2107.00 and denying them SSI benefit. Both the show -cause notices came to be adjudicated upon, against the assessee and the matter has ultimately reached this Tribunal.

(2.) LEARNED Counsel submits that the assessee's claim of non -excisability of the item stands accepted in the judgment of the Hon'ble Supreme Court in Crane Betel Nut power Works v. Commissioner of Customs & Central Excise, Tirupathi . In that case, the question considered by the apex court was whether mechanical crushing of betel nuts into smaller pieces and passing them through different sizes of sieves to obtain different sizes/grades followed by sweetening amounted to 'manufacture' or not. The issue was answered in paragraphs 30 and 31 of the apex court's judgment, which are reproduced below:

(3.) IN view of the ruling of the apex court, we hold that the 'scented supari' cleared by the assessee during the period of dispute was not excisable, there having been no 'manufacture' in the activity performed by M/s. ARR Enterprises. In the result, the impugned order is set aside and this appeal is allowed.