Whether putting together of different items of food in one tray does amount to manufacture when name card put in cutlery package shows that catering is done by appellant & not that all good are manufactured by them?

PJ/Case Law/2013-14/1977

Case: EIH LTD VERSUS COMMISSIONER OF CENTRAL EXCISE, DELHI-II

Citation: 2013 (32) S.T.R. 615 (Tri-Del)

Brief Facts: - The Appellant are flight caterers preparing certain item in their factory and clear them by paying excise duty. Further they make a cutlery pack and put a card showing their name in the cutlery packet to make known that they are doing the catering. Other items like dal, rice, curry, etc are packed separately with no brand name on them and these item are heated before they are serve on the aircraft and placed in the tray along with item like butter, jam etc manufactured by other manufacturer and then it is served. Revenue is making out a case that complete tray is an item manufactured within the brand name of appellant and they have to pay excise duty on such item by reclassifying the product under sub heading 2108.99 of Central Excise Tarrif which cover edible preparation with brand name

Appellant’s Contention: -The counsel for appellant submitted that they are paying duty on all the item like cake made in the factory and they are not doing any further manufacturing activity in the sky as alleged by the revenue and there is no case for demanding excise duty.

Respondent’s Contention:- AR for revenue submitted that final tray manufactured by the caterer are served with the brand name to the passenger thus they should pay duty on the full value of the tray for which they bill to Airline.

Reasoning of Judgment: - The Tribunal Concluded that prima facie, putting together different item of food in one tray does not amount to manufacture as there are no impression as such shown by the appellant that the item like cheese, jam etc are manufactured by the appellant. Thus Tribunal do not see any ground for demanding excise duty for the activity of putting together different item of tray in a tray and serving it with their label. Their name card put in the cutlery package can at best convey message that catering is done by the appellant and not that the goods are manufactured by the appellant. Stay was granted. The Tribunal also held that in case of other appellants identically situate (SP no. E/S/1555/2011 M/s Taj sats Air catering Ltd, Unconditional stay stand granted by order dated 21/11/2011 by following the said stay order we grant waiver of duty for admission of appeal and there shall be stay on collection of such dues during the pendency of appeal.

Decision: - Stay granted.

Comment:- In this case it was held thatputting together different item of food in one tray does not amount to manufacture as there are no impression as such shown by the appellant that the item like cheese, jam etc are manufactured by the appellant.

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PJ/Case Law/2013-14/1977

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