Custom, Excise & Service Tax Tribunal
Shri B Shanthilal Managind Director Ms ... vs Bangalore-V on 27 January, 2026
Excise Appeal Nos. E/20821-20823/2016
CUSTOMS, EXCISE & SERVICE TAX APPELLATE
TRIBUNAL
BANGALORE
REGIONAL BENCH - COURT NO. 1
Central Excise Appeal No. 20821 of 2016
(Arising out of Order-in-Original No.BLR-EXCUS-005-COM-55-15-16
dated 26.02.2016 passed by the Commissioner of Central Excise,
Bangalore.)
M/s. Sunil Agro Foods Limited
No.1/104, Ahuja Chambers, .......Appellant(s)
Kumara Krupa Road,
Bangalore - 560 001.
VERSUS
The Commissioner of Central Excise
Bangalore V Commissionerate
......Respondent(s)
BMTC Building, Above BMTC Bus Stand, Domlur, Bengaluru - 560 071.
WITH Central Excise Appeal No. 20822 of 2016 (Arising out of Order-in-Original No.BLR-EXCUS-005-COM-55-15-16 dated 26.02.2016 passed by the Commissioner of Central Excise, Bangalore.) Shri B. Shanthilal, Managing Director M/s. Sunil Agro Foods Limited .......Appellant(s) No.1/104, Ahuja Chambers, Kumara Krupa Road, Bangalore - 560 001.
VERSUS The Commissioner of Central Excise Bangalore V Commissionerate .....Respondent(s) BMTC Building, Above BMTC Bus Stand, Domlur, Bengaluru - 560 071.
AND Central Excise Appeal No. 20823 of 2016 (Arising out of Order-in-Original No.BLR-EXCUS-005-COM-55-15-16 dated 26.02.2016 passed by the Commissioner of Central Excise, Bangalore.) Shri Pramod Kumar Executive Director M/s. Sunil Agro Foods Limited .........Appellant(s) No.1/104, Ahuja Chambers, Kumara Krupa Road, Bangalore - 560 001.
Page 1 of 12Excise Appeal Nos. E/20821-20823/2016 VERSUS The Commissioner of Central Excise Bangalore V Commissionerate ........Respondent(s) BMTC Building, Above BMTC Bus Stand, Domlur, Bengaluru - 560 071.
APPEARANCE:
S/Shri Ravi Raghavan, Mohammed Ibrahim and Tushar Sharma, Advocates for the Appellants.
Shri M. Sreekanth, Asst. Commissioner (AR) for the Respondent.
CORAM: HON'BLE DR. D.M. MISRA, MEMBER (JUDICIAL) HON'BLE MR. PULLELA NAGESWARA RAO, MEMBER (TECHNICAL) FINAL ORDER NOs. 20106 - 20108 / 2026 DATE OF HEARING: 28.07.2025 DATE OF DECISION: 27.01.2026 PER: D.M. MISRA These 3(three) appeals are filed against Order-in-Original No. BLR-EXCUS-0050COM-55/15-16 dated 26.02.2016 passed by the Commissioner of Central Excise, Bangalore.
2. Briefly stated the facts of the case are that the appellants are engaged in the manufacture of Maida, Suji, Atta, Tandoori, Chiroti, R Bran, Bran Flakes, etc., during the relevant period. On the basis of intelligence their premises were searched and statements were recorded which revealed that the appellants 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 Page 2 of 12 Excise Appeal Nos. E/20821-20823/2016 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 on the Managing Director and Executive Director of the appellant- company. Hence, the present appeals.
3. At the outset, the learned advocate for the appellants has submitted that the product Rava whether roasted or not is covered under Chapter Subheading 1103 of Central Excise Tariff Act, 1985. He has submitted that Chapter 11 covers "Products of the Milling Industry; Malt; Starches; Inulin; Wheat Gluten". Referring to Chapter Sub-heading 11031120, he has submitted that it refers to 'Meal' attracting 'Nil' rate of duty. Further, referring to Chapter Note 3 of Chapter 11 and the HSN Explanatory Note to Chapter 11, he has submitted that on a collective reading of the Chapter Note and HSN, Chapter 11 includes products from the milling of the cereals of Chapter 10. In the present case, there is no doubt that 'wheat' goes through various processes like grinding, cleaning, etc., resulting into manufacture of Rava (Meal). Further, referring to HSN Explanatory Note to Chapter 1103, he has submitted that 'Meal', as described in the Explanatory Note, is a granular product than flour and is obtained by first sifting and regrinding and resifting after initial milling. The Rava is undisputedly a more granule product than the flour and it is obtained in the manner as mentioned in the definition of 'Meal' given in the HSN Explanatory Note given in the Chapter Heading 1103, therefore, Rava is covered under Chapter Heading 1103, which is not in dispute either in the show-cause notice or in the impugned order. Further, he has submitted that HSN Explanatory Note to Page 3 of 12 Excise Appeal Nos. E/20821-20823/2016 Chapter Heading 1103 covers 'durum wheat meal or semolina', which is the principal raw material in the manufacture of macaroni, spaghetti or like and Semolina is also directly used as foodstuff. It is submitted that semolina is the English common name for Rava/Suji and in this context, Bureau of Indian Standards IS 1010:1968 and IS 1010:2023 specifies standards for Rava/Suji inasmuch as the said words are interchangeable and refers to the same product. He has submitted that since Suji is specifically included in HSN Explanatory Notes to fall under Chapter Heading 1103, which substantiates the claim of the appellant that subject goods are rightly classifiable under Chapter sub-heading 1103.
3.1 Further, he has submitted that mere processing Rava with heat to reduce the moisture 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 & CGST, Noida:
[2024 (11) TMI 664 CESTAT]. The learned advocate has Page 4 of 12 Excise Appeal Nos. E/20821-20823/2016 further submitted that, in any case, the roasted Rava is not a food preparation under Chapter Heading 1901. Referring to Chapter 19.01, the learned advocate has submitted that roasted Rava and dried Rava cannot by itself be termed as food preparation and the HSN Explanatory Note refers to preparation with the basis of flour, meal, etc., and not flour, meal, etc., simplicitor. He submits that the term 'preparation' includes mixture of more than one ingredient and not one item alone. In support, they referred to the judgment of the Tribunal in the case of Reckitt & Colman of India Limited, Calcutta Vs. Collector of Central Excise, Calcutta: [1985 (22) ELT 216]. Therefore, mere drying or roasting of Rava do not make it food preparation by its preparation certainly implies that a product is prepared after carrying out the process of addition and mixing of other ingredients to the original commodity. Further, the Explanatory Note to Chapter 1901 also supports the aforesaid interpretation that a single item itself cannot be considered as a preparation.
3.2 Further, it is submitted that the computation of duty is incorrect inasmuch as no distinction has been made on actual price of 1 kg and 1½ kg of dried Rava and roasted Rava, hence the demand is bad in law. Further, assailing the finding of the learned Commissioner confirming the demand invoking extended period from 05.08.2010 to 31.10.2013, he has submitted that the appellants were under bona fide belief that the dried or roasted Rava is not manufacture in terms of Section 2(f) of the Central Excise Act, 1944 and classifiable under Chapter Sub-
heading 1103 of the First Schedule to the Central Excise Tariff Act, 1985. Further, the department became well aware of all the facts on 29.01.2013 relating to the said processing of Rava when the statements of Mr. Pramod Kumar, Executive Director was recorded and in his statement he has categorically submitted about the information of the activities undertaken by the appellant, hence, normal period of time of one year from the Page 5 of 12 Excise Appeal Nos. E/20821-20823/2016 date of such information be considered, then the and the show- cause notice issued on 08.05.2014 is barred by limitation. In support, he has referred to the judgments in the case of CCE. Vs. Nirmal Dychem: [2007 (207) ELT 161 (SC)] and NRC Ltd. Vs. CCE: [2007 (5) STR 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) at the aforesaid address. Wheat is the raw material for the manufacture of all the above products like Maida, Sooji, Atta, Tandoori, Chiroti, R. Bran, Bran Flakes etc. The wheat is first fed into hopper. From the hopper, with the help of the conveyor wheat is moved through various process areas/machines and undergoes activities like wheat cleaning, wheat conditioning and wheat grinding. At this stage, various products like Maida, Sooji or Rava, Atta and Bran emerge. The basic difference between the above different products is in their granular size. Further, by Page 6 of 12 Excise Appeal Nos. E/20821-20823/2016 sieving process the different products like Maida, Sooji, Atta, Tandoori, Chiroti, R Bran Bran Flakes etc are segregated and taken out separately for packing and dispatch (except Sooji). Out of the above products, only Sooji is taken out to a machine called purifier. In this purifier machine, the bran contents of the sooji is eliminated. Such separated Sooji is then taken to Drying machine to reduce the moisture contents in the Sooji (i.e. below 11- 12%). The Drying machine generates hot wind flow of around 200-210 degree Celsius and the Sooji is passed through the hot wind flow to reduce the moisture contents. 1 would like to add here that the initial moisture content of the raw Sooji after passing through the purifier, will be around 14.5% and the same is reduced to 11-12% of the moisture contents, after passing through the Drying machine. Subsequently, the sooji/Rava is manually sieved (using 1000-micron size) and allowed to cool for an hour. At this stage, the product which has emerged is called single roasted Rava or Rava. This is packed in unit packing of 500 gms. and 1 kg. pouch in the factory under the brand of Pillsbury Rava and the same are supplied to M/s. General Mills India Pvt. Ltd. We are also making Double Roasted Rava under the brand name of Pillsbury for M/s. General Mills India Pvt. Ltd. In such cases, the aforesaid Rava i,e. after purification, drying and cooling is again taken into the Roasting machine for roasting purposes. In this process, the Sooji Rava is roasted at 60-80 degrees C. for a period of 35 minutes. This roasted Sooji would have the moisture content of 6-8 percent. The roasted rava is manually sieved (using 1000 micron size) and again allowed to cool for an hour. At this stage, the product which has emerged is called double roasted Rava. This is packed in unit packing- 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 Page 7 of 12 Excise Appeal Nos. E/20821-20823/2016 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; cooling etc. undertaken by us for M/s. General Mills India Pvt. Ltd. in respect of the manufacture and supply of Pillsbury Rava and Double Roasted Rava.
The process flow chart for the manufacture of Sooji, Maida etc. in the factory are also at page No. 1-3 of file No. 6 of the Annexure III to the Mahazar dated 29-1-2013."
8. In the impugned order, the above process of conversion of Rava to single or double roasted has not been disputed. It is also an admitted fact that the appellant had cleared plain Rava classifying the same under Chapter Heading 1103 without payment of duty which has not been disputed by the Revenue. The Revenue alleged that when plain Rava/Suji is subjected to the process of first and/or second roasting narrated above, it amounts to 'manufacture' and classifiable under Chapter sub- heading 1901 as 'food preparation'. Precisely, it is the Revenue's contention that the process of roasting of plain Rava, changes its characteristics, nature, use and the new product that emerges is in the form of single/double roasted Rava, result into 'manufacture' and consequently its classification changes from Chapter 1103 to 1901 being 'Food Preparation'.
9. The crux of the issue is that whether Rava/Suji on roasting at an appropriate temperature 60 - 80% resulting into reduction in the moisture content be treated as 'manufacture' within the definition of Section 2(f) of Central Excise Act, 1944. Learned advocate for the appellant has argued that mere roasting of the Rava cannot be considered as a process resulting into manufacture in view of the judgment of the Hon'ble Supreme Court in the case of M/s. Star Industries (supra). In the Page 8 of 12 Excise Appeal Nos. E/20821-20823/2016 impugned order, the learned Commissioner on the other hand referring to the judgment of the Hon'ble Supreme Court in the case of Commissioner of Central Excise, Mumbai - IV vs. Fitrite Packers: 2015 (324) ELT 625 (SC) observed that processing of conversion of wheat into 'single roasted Rava' or 'double roasted Rava' amounts to 'manufacture'. In Fitrite Packers case, the Hon'ble Supreme Court referred to an earlier judgment in the case of Servo-Med Industries Pvt. Ltd. Vs. CCE, Mumbai:
2015 (319) E.L.T. 578 (S.C.) wherein the Hon'ble Supreme Court was confronted with the question of whether sterilization of syringes and needles would bring about change in the character of the final product satisfying the definition 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 for the reason that the original article continues as such despite the said process and the changes brought about by the said process.
Page 9 of 12Excise Appeal Nos. E/20821-20823/2016 (3) Where the goods are transformed into something different and/or new after a particular process, but the said goods are not marketable. Examples within this group are the Brakes India case and cases where the transformation of goods having a shelf life which is of extremely small duration. In these cases also no manufacture of goods takes place.
(4) Where the goods are transformed into goods which are different and/or new after a particular process, such goods being marketable as such. It is in this category that manufacture of goods can be said to take place."
After applying the principle laid down at para 27, their Lordships observed that in this context whether the activity of sterilization amounts to manufacture is recorded as follows:
"28. The instant case falls within the first category aforementioned. This is a case of manufacture of disposable syringes and needles which are used for medical purposes. These syringes and needles, like in the J.G. Glass case and unlike the Brakes India case, are finished or complete in themselves. They can be used or sold for medical purposes in the form in which they are. The fact that medically speaking they are only used after sterilization would not bring this case within the ratio of the Brakes India case. All articles used medically in, let us say, surgical operations, must of necessity first be sterilized.
29. .....................
30. The added process of sterilization does not mean that such articles are not complete articles in themselves or that the process of sterilization produces a transformation in the original articles leading to new articles known to the market as such. A surgical equipment such as a knife continues to be a surgical knife even after sterilization. If the Department were right, every time such instruments are sterilized, the same surgical instrument is brought forth again and again by way of manufacture and excisable duty is chargeable on the same. This would lead to an absurd result and fly in the face of common sense. If a surgical instrument is being used five times a day, it cannot be said that the same instrument has suffered a process which amounts to manufacture in which case excise duty would Page 10 of 12 Excise Appeal Nos. E/20821-20823/2016 be liable 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' or 'double roasting' of Rava does not bring any change in the item itself nor any change in its physical properties/characteristics, only the process of roasting reduces the moisture content of Rava/Suji. Plain Rava/Suji when subjected to first roasting and/or second roasting, no transformation takes place nor the resultant roasted product having an altogether distinct character and use; similarly to the process of repeated sterilisation as held in the above case, every time Rava/Suji is roasted i.e. either first time or second time or thereafter would not bring out any new commodity so as to make the process of roasting/ heating as 'manufacture. Therefore, the finding of the learned Commissioner that the process of roasting i.e. 'single roasting' and/or 'double roasting' of the plain Rava/Suji resulted into manufacture, in our opinion, cannot be sustained. Since, we have come to the opinion that the process of roasting undertaken by the appellant does not Page 11 of 12 Excise Appeal Nos. E/20821-20823/2016 result into manufacture, further discussion about change in its classification becomes academic, hence, not dealt into.
11. In view of the above discussion, thus Rava/suji when subjected to the process of roasting does not result into "manufacture" within the definition of Section 2(f) of Central Excise Act, 1944, hence, not leviable to excise duty. In the result, the impugned order is set aside and the appeals are allowed with consequential relief, if any, as per law.
(Order pronounced in Open Court on 27.01. 2026) (D.M. MISRA) MEMBER (JUDICIAL) (PULLELA NAGESWARA RAO) MEMBER (TECHNICAL) rv Page 12 of 12