2022 (5) TMI 252 - AT - Central Excise

Tribunal rules in favor of manufacturer on excise duty exemption interpretation

M/s. Deepak Vegpro Private Limited, Vanaspati Division Versus Commissioner of Central Excise & Service Tax, Patna

M/s. Deepak Vegpro Private Limited, Vanaspati Division Versus Commissioner of Central Excise & Service Tax, Patna - TMI Issues:- Interpretation of Notification No.89/1995-CE for exemption from excise duty on incidental products- Classification of 'fatty acid' as excisable goods or waste- Eligibility for exemption under Notification No.10/1996-CE for tin containers/HDPE jarsAnalysis:1. Interpretation of Notification No.89/1995-CE: The Appellant, a manufacturer of refined palm oil and Vanaspati ghee, availed exemption under Notification No.89/1995-CE. The issue revolved around whether the incidental products arising during the manufacturing process, such as 'fatty acid,' should be considered excisable goods or waste. The Appellant argued that these products are waste and covered by the exemption. The Tribunal referenced a previous decision and the Supreme Court's ruling to conclude that such incidental products are waste arising during refining and are covered by the exemption.2. Classification of 'fatty acid' as excisable goods or waste: The Commissioner alleged that the Appellant removed 'fatty acid' without paying duty, claiming it was liable for duty payment. The Appellant contended that 'fatty acid' is a waste arising during the manufacture of vanaspati ghee/refined palm oil, not an excisable good. The Tribunal agreed with the Appellant, emphasizing that 'fatty acid' is not manufactured from crude palm oil but is a byproduct of the refining process, thus qualifying as waste covered by the exemption.3. Eligibility for exemption under Notification No.10/1996-CE: The Appellant also argued that the tin containers/HDPE jars manufactured in-house were exempted goods under Notification No.10/1996-CE. The Tribunal found that the Ld. Commissioner erred in denying the Appellant the benefit of the exemption, as the tin containers/HDPE jars were also eligible for exemption under Notification No.10/1996-CE. The Tribunal held that the Appellants were entitled to the exemption contained in Notification No.89/1995-CE for products incidentally arising during the manufacture of vegetable oils, setting aside the impugned orders and allowing the Appeals filed by the Appellants with consequential relief.This detailed analysis of the judgment highlights the key legal issues, arguments presented by both parties, and the Tribunal's findings and conclusions, ensuring a comprehensive understanding of the case.