Rectified spirit and ethyl alcohol treated as the same product, defeating the excise demand notice.

The show cause notice and demand were held unsustainable because their sole was the premise that rectified spirit was not covered by the First Schedule to the Central Excise Tariff Act, 1985, so the assessee manufactured non-excisable goods and lost exemption under Notification No. 67/1995-CE. The Tribunal relied on an earlier decision treating ethyl alcohol and rectified spirit as one and the same, and on that basis found the foundation of the notice defective. The assessee therefore succeeded in appeal.

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Issues: Whether the show cause notice and consequent demand were sustainable in view of the finding that rectified spirit and ethyl alcohol are one and the same.

Analysis: The sole basis of the notice was that rectified spirit was not specified in the First Schedule to the Central Excise Tariff Act, 1985 and, therefore, the assessee was alleged to have manufactured non-excisable goods and to have lost the benefit of the exemption under Notification No. 67/1995-CE dated 16.03.1995. The Tribunal noted that an earlier decision had already held that ethyl alcohol and rectified spirit are one and the same. On that basis, the foundation of the notice was held to be unsustainable.

Conclusion: The show cause notice was not sustainable and the assessee succeeded in appeal.

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