Incidental refining by-products as waste: sale value alone does not make fatty acids, wax and gums excisable.

Fatty acids, wax and gums arising incidentally during refining of crude vegetable oil are treated as waste, not separately manufactured excisable goods, because the process is directed to removing unwanted materials and producing refined oil. Their saleability or commercial value does not by itself make them excisable. On that basis, such by-products fall within Notification No. 89/95-CE, and exemption is available where they arise in the course of manufacture as incidental waste.

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Issues: Whether fatty acids, wax and gums arising during the refining of crude vegetable oil are waste within Notification No. 89/95-CE and therefore exempt from duty.

Analysis: The refining process is undertaken to obtain refined oil by removing unwanted materials present in the crude oil. The incidental emergence of fatty acids, wax and gums occurs in the course of removal and refining, not as independent manufactured end products. Their saleability or commercial value is not determinative of excisability. Applying the principle that manufacture requires emergence of a new and different article, these incidental products are not manufactured excisable goods but are waste arising during the course of refining.

Conclusion: The products are to be treated as waste and are covered by Notification No. 89/95-CE; exemption is available to the assessee.

Ratio Decidendi: Incidental products generated in the course of refining, where the manufacturing process is directed to removal of unwanted materials and not to production of those incidental products, are not rendered excisable merely because they have sale value and may fall within an exemption for waste arising in manufacture.

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