Crushing Chillies into Powder Not ‘Manufacture’, Exempt from Excise Duty: CESTAT

The Customs, Excise and Service Tax Appellate Tribunal (CESTAT) has ruled that the process of crushing chillies into powder does not constitute 'manufacture' under the Central Excise Act and is therefore exempt from excise duty. The tribunal reasoned that the activity of simply grinding chillies does not result in a new product with a distinct name, character, or use. This decision provides clarity on the definition of 'manufacture' in the context of excise duty and offers relief to businesses involved in similar processing activities of agricultural produce. The ruling emphasizes that for an activity to be considered manufacture, it must involve a transformation that results in a commercially different product.