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2016 (6) TMI 772 - MADRAS HIGH COURT

2016 (6) TMI 772 - MADRAS HIGH COURT - 2016 (339) E.L.T. 551 (Mad.) - Levy of excise duty - manufacture - whether food cooked and served in Hotels and Restaurants are excisable - SSI exemption - whether the value of the food sold in Restaurants should be taken into account to compute the aggregate value of clearances so as to decide the eligibility of availing the exemption provided under the Notification 8/2003-CE, dated 01.03.2003 - Maintainability of writ petition - alternative appellate reme .....

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Hon'ble Supreme Court in the case of Indian Hotels Co., Ltd., & Ors., case, which arose under the Income Tax Act. - As rightly pointed out by the learned Senior Standing counsel appearing for the respondent what the petitioner seeks to agitate is a disputed question of fact and such disputed questions would not be normally adjudicated in a Writ Petition, more particularly, when it involves a taxation statue. Therefore, the petitioner has not made out any grounds to entertain a Writ Petition .....

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company incorporated under the Companies Act, engaged in hospitality industry and registered under the provisions of the Tamil Nadu Value Added Tax Act and the Finance Act on the file of the respondent, has filed this Writ Petition, challenging the order in Original Nos.2&3 of 2015, dated 30.01.2015. By the impugned order, the respondent confirmed the demand of ₹ 5,36,733/- being the duty payable by the petitioner during the period 01.04.2012 to 30.11.2012, under Section 11A(10) of the .....

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a question as to why the petitioner has not availed the alternate remedy of filing an appeal before the CESTAT as against the impugned order, pointing out that the said remedy is not only effective, but efficacious. The learned counsel of the petitioner submitted that in the light of the decision of the Hon'ble Supreme Court in the case of Indian Hotels Co., Ltd., & Ors., vs. Income Tax Officer, Mumbai & Ors., reported in (2000) 7 SCC 39, the petitioner is entitled to challenge the i .....

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returns till February 2012. From March 2012, they did not remit excise duty and filed monthly returns claiming that their aggregate value of clearances has not crossed the threshold limit as provided under Notification 8 of 2003, CE, dated 01.03.2003, as amended. The Department, on scrutiny, found that edible food preparation manufactured and removed by the petitioner is exempted from payment of duty vide Notification No.12, 2012-CE, dated 17.03.2012, but the petitioner has not paid duty on item .....

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ackground of these facts, a show cause notice dated 09.05.2013, covering period from April 2012 to November 2012, was issued and another show cause notice dated 08.01.2014, covering period from December 2012 to September 2013 was issued. The petitioner submitted their reply vide letters dated 21.06.2013, and 28.01.2014, contending that benefit of exemption is available to cooked food, as it is not covered under the definition of 'manufacture' as provided under Section 2(f) of the Central .....

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heir contention was that cooking of food in kitchen cannot be said to be a process amounting to manufacture, as it is necessary that a new distinct commercial product must come into existence after undergoing the manufacturing process. However, after cooking pulses, rice etc., they continue to remain as pulses, rice etc and no distinct commodity emerges after cooking. After affording an opportunity of personal hearing, the Commissioner framed two issues for consideration, namely:- (i) whether th .....

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ned under Section 2(d) of the Act and proceeded to discuss the contention raised by the petitioner stating that after cooking no distinct product emerges and held that such a plea was fallacious. Further, after taking note of the decision of the Hon'ble Supreme Court in UOI vs. Delhi Cloth and General Mills, reported in (1997) 4 SCC 303 held that after cooking, a new and different product emerges and therefore, it is manufacture. Ultimately, the proposals made in the show cause notice was co .....

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t anchor of the submissions of the learned counsel and it is his endeavour to state that what is done by the petitioner is not manufacture and processing of food to make it edible would not fall within the definition of manufacture as defined under Section 2(f) of the Central Excise Act. 7. The learned Senior Standing counsel appearing for the respondent submitted that all issues raised by the petitioner have been threadbare considered by the respondent and if the petitioner is aggrieved, he has .....

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ra). The said decision arose under the provision of the Income Tax Act and the matter pertains only to the flight kitchen operated by the appellant Hotel. Therefore, the Hon'ble Supreme Court did not deal with the other contentions. In the said case, CIT (Appeals) accepted the contention of the assessee that Taj Flight Kitchen cannot be considered as a hotel, as it is a separate industrial undertaking, which is engaged in production of food packages on a large, organised and mechanised basis .....

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ions under Section 80-J, in respect of the capital employed in the flight kitchen. Though two other cases were also dealt with in the said judgment, at present, I am not referring to the same, as they are not germane to the facts of the instant case. After referring to Sections 80-J(1) proviso, 80-J(4), 80-J(6) and Section 32A of the Income Tax Act, the Hon'ble Supreme Court pointed out that for getting benefit of deduction or investment allowance, the requirement is that the assessee compan .....

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age used in the Sections. In the context of the provisions which deal with grant of investment rebate or deduction under section 80J it is apparent that it is used to mean production of a new article or bringing into existence some new commodity by an industrial undertaking. It would not be applicable in cases where only processing activity is carried out. 9. Thus, the decision of the Hon'ble Supreme Court pertained to the question as to whether an assessee would be entitled to the benefit o .....

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al Excise Act, 1944, is as under:- (f) "manufacture" includes any process,- (i) incidental or ancillary to the completion of a manufactured product; (ii)which is specified in relation to any goods in the Section or Chapter notes of the First Schedule to the Central Excise Tariff Act, 1985 (5 of 1986) as amounting to manufacture; or (iii) which, in relation to the goods specified in the third schedule, involves packing or repacking of such goods in a unit container or labeling or relabe .....

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