1999(04)LCX0158

IN THE CEGAT, COURT NO. IV, NEW DELHI

S/Shri Lajja Ram, Member (T) and S.S. Kang, Member (J)

VENKY’S FAST FOOD

Versus

COMMISSIONER OF CENTRAL EXCISE, PUNE

Final Order No. 344/99-D, dated 23-4-1999 in Appeal No. E/4183/92-D

CASE CITED

Dy. Commissioner v. PIO Food Packers — 1980 (6) ELT 343 (S.C.) — Distinguished [Paras 5, 10]

REPRESENTED BY :   Shri V.S. Nankani, Advocate, for the Appellants.

Shri A.K. Agarwal, SDR, for the Respondents.

[Order per : S.S. Kang, Member (J)]. - The appellants filed this appeal against the Order-in-Appeal dated 22-4-1992 passed by the Collector of Central Excise (Appeals).

2. In the impugned order the products manufactured by the appellants were held to be classifiable under sub-heading 1601.19 of the Central Excise Tariff.

3. The brief facts of the case are that the appellants engaged with the business of running and operating poultry farms for breading chicken. The appellants also engaged in the processing of Chicken and manufacture the following preparations of chicken :-

1. Chicken Kabab

2. Chicken Kathi Kabab

3. Chicken Kofta

4. Chicken Pakodas

5. Chicken Chunks

6. Chicken Pre-spiced Kheema

7. Chicken Burger Patties.

4. The appellants filed the classification list in respect of above mentioned products and claimed the classification under sub-heading 1601.90 of the Central Excise Tariff. A show cause notice was issued to the appellants stating therein that their product is classifiable under sub-heading 1601.19 of the Central Excise Tariff. After adjudication the classification list was approved classifying the products under sub-heading 1601.19 of the Excise Tariff. The appellants filed appeal and vide the impugned order the appeal was dismissed.

5. Learned Counsel appearing on behalf of the appellants submits that the process undertaken by the appellants to prepare the products in question “do not change the characteristics, use or nature of Chicken”. By application of the processes undertaken by the appellants there is no transformation of chicken into a new article commercially known and understood and that mere application of labour or processing did not result into bring into existence new products so as to call manufacture within the meaning of Section 2(f) of Central Excise Act. He relied upon the decision of the Hon’ble Supreme Court in the case of Deputy Commissioner, Sales Tax (Law), Board of Revenue (Taxes), Ernakulam v. PIO Food Packers, reported in 1980 (6) ELT 343 (S.C.) and submits that in this case the Hon’ble Supreme Court held that conversion of Pineapple fruit into pineapple slices for sale in sealed cans cannot be said to be manufacture. He further submits that assuming that the appellants do manufacture the products n question but the said products are not preparations of meat. He further submits that even assuming meat includes chicken, as the products in question are not preparations of meat, the same are classifiable under Chapter 2 of the central Excise Tariff as they are not cooked or boiled or steamed.

6. He also pleaded that even if the goods in question are classifiable under Chapter 16 of the CET, the correct sub-heading of classification would be 1601.90. He, therefore, prays that the appeal be allowed.

7. Learned Senior Departmental Representative appearing on behalf of the respondent submits that the process undertaken by the appellants to produce the products in question amounts to manufacture. He submits that the appellants dress the whole chicken and after deboning, the meat of chicken was minced to various sizes as per requirement. Thereafter, the meat of chicken were mixed with spices or potatoes or green peas as per requirement. This mixture was chilled at the temperature of 40 Centigrade for 12 hours except in the case of Chicken Kheema. Thereafter this mixtures were shaped to sizes for different products like Chicken Koftas, Kababs, Burger Patty and Chicken Chunks. In the case of Chicken Koftas, the process is manually carried out whereas in the case of Kababs, Burger patty and Chicken Chunks the forming is done by the machine. After this Chicken Pakodas, Chicken Koftas and Chicken Chunks were coated with bread crumbs or flour. He further submits that in the case of Chicken Pakodas, Chicken Koftas and Chicken Chunks were flass fried and after that the products in question were freezed at the temperature of -40⁰ Centigrade. Thereafter, the products in question were packed into different sizes of plastic bags. These bags were printed with the Trade name of the product. He submits that all these processes were carried out by the appellants to transform the meat of the Chicken into new and different articles which are known in the market as Chicken Kabab, Chicken Kathi Kabab, Chicken Kofta etc.

8. He further submits that the products in question are not classifiable under Chapter 2 of the CET as this Chapter only includes meat or Edible Offals and this chapter does not includes preparations of meat. He submits that preparations of meat is classifiable under Chapter 16 of the CET and is rightly classifiable under sub-heading 16,01.19. He, therefore, prays that the appeal be dismissed.

9. Heard both sides.

10. The first contention of the appellants is that the processes carried out by the appellants to produce the products in question does not amount to manufacture. The processes carried out to the Chicken meat as explained by the learned SDR were not disputed by the appellants. From the process undertaken by the appellants we find that the Chicken meat was transformed into new and different articles which have a distinctive names and character and use such as Chicken Kabab, Chicken Kathi Kabab, Chicken Kofta, Chicken Pakodas, Chicken Chunks, Chicken Kheema and Chicken Burger Patties. The facts of the case relied upon by the appellants in the case of Deputy Commissioner, Sales Tax (Law), Board of Revenue (Taxes), Ernakulam v. PIO Food Packers, reported in 1980 (6) ELT 343 (S.C.) are different. In that case the manufacturer is simply cutting the pineapple fruits into slices. In the present case the appellants are after cutting, the meat of the Chicken, carried out different processes including mixing of spices or Potato or green peas and thereafter frying the same. Hence the ratio of the decision relied upon by the appellants are not applicable to the present case. Therefore the process undertaken by the appellants amounts to manufacture.

11. The second contention of the appellants is that the products in question are classifiable under the Chapter 2 of the CET. We find that the Chapter 2 of the CET relates to meat and Edible meat Offals and Chapter Note (2) of the Chapter 2 reads as under :

“This Chapter covers products which are chilled, frozen, salted, in brine, dried or smoked but not otherwise prepared.”

From the process undertaken by the appellants the Chicken meat was mixed with spices or potatos or green peas as per requirement to produce the different products and, thereafter, these mere fried. Therefore, these are preparations of the Chicken meat and not simple chilled frozen meat. Therefore, it is not classifiable under Chapter 2 of the CET.

12. The third contention of the appellants is that the products in question were classifiable under sub-heading 1601.90 and not under 1601.19 of the CET. Chapter 16 is reproduced below :

Preparations of Meat, of Fish or of Crustaceans, Molluscs or other Aquatic Invertebrates

The contention of the appellants is that the products in question are other preparations of meat and are not cooked, peeled and frozen. So these are covered under sub-heading 1601.90 of CET.

13. We find that the General Explanatory Notes to the CET provides that where in Col. 3 of the Schedule, the description of an article or group of articles under a heading is preceded by “-”, the said article or group of articles shall be taken to be a sub-classification of the article or group of articles covered by the said heading. Where, the description of an article or group of articles is preceded by “-”, the said article or group of articles shall be taken to be a sub-classification of the immediately preceding description of article or group of articles. As discussed above we find that the products in question are preparation of chicken meat which are fried. From this General Explanatory Note we find that the products in question are rightly classifiable under sub-heading 1601.19 of the tariff as cooked-preparation of meat of Chicken other than prawns and shrimps put up in a unit containers and ordinarily intended for sale.

14. In view of the above discussions, we do not find any infirmity in the impugned order and dismiss the appeal.

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Equivalent 2000 (124) ELT 939 (Tribunal)

Equivalent 1999 (032) RLT 0686