Rectified spirit classified as ethyl alcohol under tariff item 22072000, defeating the demand and denial of CENVAT credit.

Rectified spirit was treated as the same commodity as ethyl alcohol for tariff purposes, following the view that rectified spirit is spirit purified by distillation and that the two expressions are one and the same for the issue in dispute. On that basis, rectified spirit not meant for human consumption was classified under tariff item 22072000. Because the classification premise in the show cause notice failed, the demand and the denial of CENVAT credit could not be sustained.

---

---

Issues: Whether rectified spirit is the same commodity as ethyl alcohol and, if so, whether it falls under tariff item 22072000 so as to sustain the demand and denial of CENVAT credit.

Analysis: The relevant tariff position before and after 01.03.2005 was examined, along with the manufacturing process in which molasses are fermented to obtain ethyl alcohol, which is then denatured. The Court relied on the Supreme Court's observation that rectified spirit is spirit purified by distillation and that ethyl alcohol and rectified spirit are one and the same for the purpose in issue. On that basis, rectified spirit not meant for human consumption was treated as ethyl alcohol, which is covered by tariff item 22072000. The foundation of the show cause notice was therefore found unsustainable.

Conclusion: Rectified spirit is classifiable as ethyl alcohol under tariff item 22072000, and the demand based on denial of CENVAT credit could not survive.

Ratio Decidendi: Where rectified spirit and ethyl alcohol are treated as the same commodity for tariff classification, denial of credit or duty consequence cannot rest on the premise that rectified spirit has no place in the tariff.

---