2018 (5) TMI 1117 - AT - Central Excise

Tribunal exempts appellants from excise duty on by-product: refined palm oil waste not taxable

M/s. Sri Devi Oil Pvt. Ltd. Versus CCE, Salem

The Tribunal held that the appellants were not liable to pay excise duty on fatty acid/soap stock generated as a by-product in the manufacture of refined ... Liability of Excise duty - by-product - fatty acid / soap stock - Held that: - issue has been decided by the Larger Bench in the case of M/s. Ricela Health Foods Ltd. & Ors. Vs. Commissioner of Central Excise, Chandigarh [2018 (2) TMI 1395 - CESTAT NEW DELHI], wherein it has been held that these are treated as waste for the purpose of exemption N/N. 89/95-CE and therefore not liable to duty - demand do not sustain - appeal allowed - decided in favor of appellant. Issues:Whether the appellants are liable to pay excise duty on fatty acid/soap stock generated as a by-product in the manufacture of refined palm oil.Analysis:The case involved the appellants, manufacturers of 'Refined Palm Oil,' who were alleged to have cleared fatty acid or soap stock without paying duty. The original authority confirmed the demand, interest, and imposed a penalty, leading the appellants to appeal before the Tribunal.The appellant's counsel argued that the central issue was the liability to pay excise duty on the fatty acid/soap stock generated during the manufacture of refined palm oil. Reference was made to a decision by the Larger Bench in the case of M/s. Ricela Health Foods Ltd. & Ors. Vs. Commissioner of Central Excise, Chandigarh, where it was held that such products are not subject to duty.The Assistant Commissioner, representing the respondent, reiterated the findings in the impugned order during the proceedings before the Tribunal.After hearing both sides, the Tribunal considered whether fatty acid/soap stock generated during the manufacture of refined palm oil was liable to central excise duty. The Tribunal referred to the decision of the Hon'ble Apex Court in the case of Commissioner of Central Excise Vs. Indian Aluminium Company and other cases, which established that these products were considered waste for the purpose of exemption Notification 89/95-CE and therefore not duty liable.In line with the decision of the Larger Bench of the Tribunal and the legal precedents cited, the Tribunal concluded that the demand for duty could not be sustained. Consequently, the impugned order was set aside, and the appeal was allowed with any consequential relief deemed appropriate.