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Taj Sats Air Catering Ltd. Versus CCE, Delhi-II

2016 (3) TMI 777 - CESTAT NEW DELHI

Manufacture - complete food tray as served to the passengers on board the aircraft - edible preparations bearing the brand-name - sustainability of demand for extended period and penal action against the appellant - Held that:- Out of Food preparations as contained in the food tray served to the passengers on board, admittedly, the appellants did prepare dal, roti, rice, curry etc. and supplied the same in trays and bowls covered with aluminium foil. However, these are not the items on which Cen .....

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he appellants are supplying food preparations with brand-name to the airlines. Admitted facts are that the food prepared by the appellants is supplied without brand-name. In separate tray is the cutlery pouch which contains the label with logo and name of the appellant. The same is supplied separately. These are put together by the airline staff and served to the passengers. In any case since the Department has not established the sustainability of the demand on the ground of manufacture, this a .....

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imilarly placed caterer was paying excise duty on such meals. The Tribunal accordingly, held that it is difficult to say that there was suppression of fact or wilful misstatement of facts or intention to evade payment of duty. We find in the present case on a similar situation the demand after many years of the impugned period is not sustainable in view of the facts and circumstances of the case. As such, we find the impugned order is not sustainable both on the question of manufacture and on ti .....

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engaged in the business of airline catering and manufacture of cakes, pastries and chocolates liable to Central Excise Duty. They have entered into catering agreement with various airlines for supply of meal and food items in accordance with menu given by the respective airline from time to time. Normally the food items prepared by the appellants at their unit included the vegetarian/non-vegetarian meal items consisting of dal, curry, rice etc. bread, cakes, pastries, chocolates etc., cut fruits .....

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tems like curd pickle are placed in a trolley and supplied to the airlines. The prepared meal, other than mentioned above, consisting of dal, curry, rice etc. are placed in the bowls covered with aluminium foils and are placed in another trolley for heating in the flight before service to the passengers. One such meal plate or bowl alongwith the pastry, food items and other bought out items are placed in a tray alongwith water bottle and supplied to the passengers in flight. As per the requireme .....

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em to various airlines classifying the same under C.E.T.H. 2108 for the financial year 2004-05 and under C.E.T.H. 2106 for the financial years 2005-06 and 2006-07. After due process the case was adjudicated vide the impugned order dated 18.02.2011. 3. The ld. Counsel for appellant submitted that: (a) The impugned order is legally unsustainable as it confirms duty on the tray consisting of all food preparations, salad, curd, sweets and water bottles. These items are not emerging due to process of .....

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tray consisting of main meal dal, rice and vegetables and the tray consisting of readymade bought out items curd, pickle, butter mineral water, are supplied to the airlines separately in 2 different trolley/ cabinet. The airline staffs add the contents of these two trays while serving the passengers. (c) The impugned goods, placed in a tray is not branded food preparation . It is rightly classifiable under C.E.T.H. 2108.99, prior to 28.02.2005 and CETH 2106 90 99 after 28.02.2005 with Nil rate o .....

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from the appellants factory to the airline. The duty on bought out items like curd, pickle, mineral water, butter and also cutlery pack and food tray supplied by the airline cannot be subjected to tax at the hands of the appellant. (e) Extended period of demand is not invokable in this case as there is no fraud, misstatement or suppression of facts on the part of the appellants as can be seen from the facts of the case. The issue involved in the present case is of pure legal interpretation and .....

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e ld. A.R. reiterated the findings in the impugned order. 6. We find the points for decision in this appeal are: (a) Whether or not the appellants are engaged in the manufacture of edible preparations bearing the brand-name during the impugned period? (b) The sustainability of demand for extended period and penal action against the appellant. 7. Regarding the question whether the appellants are engaged in the manufacture of excisable goods namely, food preparations; we find there is no analysis .....

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rtaken by the appellant especially in the context of the appellants plea that the Department cannot tax the meal supplied by the airlines to the passengers on account of purported manufacturing activity on the part of appellant. 9. We find that the show cause notice proposed a demand on the ground that the entire food tray served on board in the aircraft is an item manufactured by the appellant. The value accordingly was of entire tray alongwith various items contained therein. The said demand .....

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ed that placing these items together in a tray is being done on board by the airline staff before service to the passengers. The Revenues case is that the appellants are liable to Central Excise duty under the category of edible preparations bearing a brand-name. From the nature of process and the methodology of supply by the appellant to the airlines and thereafter by the airlines staff to the passengers on board, we find that it is not legally sustainable to tax the entire meal tray as edible .....

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separately not with the prepared food items like dal, rotti etc. In other words the food items prepared and supplied by the appellants never had brand-name when they were cleared from the premises of the appellant. 11. We find that without examining the nature of manufacture and thereby the liability of the appellant the Original Authority straight away moved to the classification of the impugned meal tray applying the provisions of Rule 3 (c) of interpretation rules to determine the correct cla .....

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above rule will arise thereafter only. 12. On perusal of the impugned order and on examining the submissions made by the appellants, we find that the Revenue has not established the liability on the appellant for their activity of manufacturing branded food preparations. Out of Food preparations as contained in the food tray served to the passengers on board, admittedly, the appellants did prepare dal, roti, rice, curry etc. and supplied the same in trays and bowls covered with aluminium foil. H .....

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d that the Original Authority found that the appellants are supplying food preparations with brand-name to the airlines. Admitted facts are that the food prepared by the appellants is supplied without brand-name. In separate tray is the cutlery pouch which contains the label with logo and name of the appellant. The same is supplied separately. These are put together by the airline staff and served to the passengers. In any case since the Department has not established the sustainability of the d .....

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