In Brief
The Commissioner of Central Excise challenged the Customs Appellate Tribunal's order regarding the assessability of food flavours manufactured by United Spirits Ltd. The company mixed odoriferous substances (duty-paid essences) and claimed such mixing did not constitute manufacture. It received royalty from contract bottling units but argued this was unrelated to food flavour prices. The tribunal accepted these contentions and found two show cause notices time-barred. The Supreme Court held the tribunal's reasoning was ambiguous and insufficiently factual. While reaffirming that manufacture requires transformation into a distinct product, the Court remitted the matter for detailed reconsideration of the process involved, royalty nexus, and limitation dates.
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