Tattenhall Dairy Products, which produces Cheshire Farm Ice Cream, was prosecuted by the Health and Safety Executive (HSE) following the incident at Drumlan Hall Farm on 8 August 2013.
Chester Magistrates' Court heard the 60-year-old employee, from Tattenhall, who does not want to be named, had been asked to clean the fruit feeder so it was ready for the next batch of ice cream.
She assumed the machine was switched off and tried to remove pieces of cookies at the back with her left index finger when it became caught by the rotating blades. Her finger was cut off to below the second knuckle.
The court was told employees had needed to clean the machine up to three times every day. They did this by removing the chute which fed in the fruit, but this meant dangerous moving parts became exposed.
The HSE investigation found employees had been told to switch off the machine when they cleaned it, but no other measures were put in place to make sure they were not put in danger. This meant there was a high risk of them being injured if they simply forgot to check, due to human error.
The company has since installed an interlocking device on the machine, which means power is automatically cut when the chute is removed.
Tattenhall Dairy Products, of Newton Lane in Tattenhall, pleaded guilty to single breaches of the Provision and Use of Equipment Regulations 1998 and the Management of Health and Safety at Work Regulations 1999.
HSE inspector Lorna Sherlock said: "The fruit feeder needed to be cleaned several times every day so it was almost inevitable that an employee would forget to check it was switched off on one occasion.
"Tattenhall Dairy Products should have had suitable guarding or, as a minimum, a robust safe system of work in place to make sure no one was injured but there was none. A worker lost her index finger as a result.
"It would have been relatively easy to fit a device to the machine which automatically cut the power when the chute was removed. However, the company waited until after the incident before making this vital safety improvement."
www.hse.gov.uk/manufacturing