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2014 (8) TMI 629 - AT - Service TaxBusiness Auxiliary Service - Whether process of milling/ grinding of wheat into "maida", "suji", "atta" and "bran" flour would amount to "manufacture" under Section 2(f) of the Central Excise Act, 1944 - Held that:- The various goods viz. maida, sooji, atta and bran produced by the roller flour mills are covered under Chapter 11 and the raw-material "Wheat" is classifiable under Chapter 10 of CETA, 1985. As the products "wheat" and "wheat flour" fall under different Chapters, the activity undertaken by flour mills amount to manufacture and gets covered under the exclusion clause of the definition of Clause 19 of Section 65 of the Finance Act, 1994. In this regard the judgement of Hon'ble High Court of Madras in the case of United India Roller Flour Mills Ltd vs Union of India reported in [1980 (9) TMI 89 - HIGH COURT OF MADRAS] may please be referred, wherein the imposition of duty on "Maida" in the Finance Bill 1971 and exemption provided subsequently vide Not. No.162/71 dt 10.08.71 were discussed. Levy of duty on "Maida" confirms that conversion of wheat into "Maida" amounts to manufacture to attract levy under Section 3 of the Central Excise Act, 1944. On a perusal of the aforesaid communications, we find that the Chief Commissioner of Customs & Central Excise Coimbatore Zone as well as Director (CX.1), of Ministry of Finance, Department of Revenue had a view that conversion of ‘wheat' into ‘wheat products' like maida, suji etc., amounts to manufacture. It is noticed that the demand of service for the subsequent period was set aside by the Commissioner (Appeals), Madurai. Hence, the demand of tax, prima facie , is not sustainable. Accordingly, the pre-deposit of tax along with interest and penalty is waived till the disposal of the appeal - Stay granted.
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