INDIA BUSINESS WORLD - FEBRUARY 1^st - FEBRUARY 15^th - 2008

ALMONDS, CASHEW NUTS PACKAGING LIABLE FOR EXCISE DUTY, RULES SC

The Supreme Court has ruled that packaging of processed cashew nuts, peanuts, almonds etc in the form of dry roasting, oil roasting, salting would attract excise duty. The sale of such products by the companies without registering with the authorities would also invite imposition of penalty, said the apex court.

A bench of Justice Ashok Bhan and Justice Dalveer Bhandari set aside an order of The Customs, Excise and Service Tax Appellate Tribunal, Mumbai which had held such goods were not assessable to duty. The court restored to an order of the authorities imposing duty on such products and penalty on the defaulting assessees.

The court said that it is crystal clear that such products have to be classified under Chapter 20 of the Central Excise Tariff Act. It deals with dutiable products. Relying on its earlier decisions, the court said that certain processes which may not otherwise amount to manufacture have been deemed to be manufacture by the Parliament under section 2(f)(ii) of the Central Excise Act.

The verdict came on a bunch of similar appeals. In one such case, M/s Phil Corporation did not register with the Central Excise Authorities and cleared its goods without payment of excise duty.