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CA Ysil Karunai (Querist)

14 March 2010 A food Restaurant receives a show cause notice from CE department. The issue was, the Restaurant preparing foods and selling those foods to customers who are coming and had foods and in parcel also, the notice stating that the foods are manufactured by the restaurant, since ultimately foods are completely distinct from a product which was originally input. [e.g., Dosa which are completely different from Rice(Raw material), Floor (WIP), Dosa (Finished goods)].
Advice:
1. Whether the issue of show cause notice is valid on the above issue?
2. would your answer will be different, the foods are sell to customers in parcel with a brand name of the restaurant?

Madhukar N Hiregange

Madhukar N Hiregange (Expert)

15 March 2010 Under which head is the same envisaged to be classified? In my view there is no catgeory where CED is applicable. It would be nil rated or exempted. See from SCN and give more details.

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