High Court affirms Tribunal's order on excise appeal deposit, rules Fatty Acid not waste

The High Court upheld the Tribunal's decision to direct the appellant to deposit Rs. 10 lacs and waive the remaining amount in an appeal under section 35G of the Central Excise Act. The Tribunal ruled that Fatty Acid, excluded from Chapter 15 under Note 1(e), cannot be considered waste and is marketable, satisfying the dual test of manufacture and marketability for excise levy. Notification No. 89/95 was deemed inapplicable as Fatty Acid cannot be treated as waste. The central excise appeal was ultimately dismissed.

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Issues involved: Appeal u/s 35G of Central Excise Act against Tribunal's order on waiver of pre-deposit of duty on Fatty Acid claimed as waste in Vanaspati Oil production.

Summary:
The appellant claimed exemption for Fatty Acid as waste under Notification No. 89/95-C.E. The Commissioner held the exemption applicable to Fatty Acid, Ghad/Soap Stock, Gums, Spent Earth, and Waxes. However, the revenue contended that Fatty Acid is not waste but a by-product liable to duty, citing the decision in Commissioner of Central Excise, Chennai-III & I v. Vijay Refiners (P) Ltd., 2009 (238) E.L.T. 649.

The Tribunal ruled that Fatty Acid, excluded from Chapter 15 under Note 1(e), cannot be considered waste and is marketable, satisfying the dual test of manufacture and marketability for excise levy. Notification No. 89/95 was deemed inapplicable as Fatty Acid cannot be treated as waste.

The High Court, considering precedents like Silliguri Municipality v. Amalendu Das, AIR 1984 SC 653, upheld the Tribunal's decision to direct the appellant to deposit Rs. 10 lacs and waive the remaining amount, as the Tribunal exercised discretion based on established legal principles.

In conclusion, the central excise appeal was dismissed.

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