2023 (3) TMI 535 - AT - Central Excise

Tribunal exempts waste products from excise duty under notification 89/1995-CE.

The tribunal held that products like gums, waxes, and fatty acids arising during the refining process of vegetable oil are waste and entitled to exemption ... Levy of excise duty - spent earth arising out of the refined vegetable oil (intermediate goods) - exempt goods or not - HELD THAT:- The very same issue has been considered by this tribunal in the case of M/S PRIYANKA REFINERIES PVT LTD UNIT II VERSUS COMMISSIONER OF CENTRAL EXCISE, CUSTOMS & SERVICE TAX – HYDERABAD - II [2019 (7) TMI 249 - CESTAT HYDERABAD] wherein, the tribunal has held that matter has been decided by the Larger Bench of the Tribunal in M/S RICELA HEALTH FOODS LTD., M/S J.V.L. AGRO INDUSTRIAL LTD., M/S KISSAN FATS LIMITED VERSUS CCE, CHANDIGARH, ALLAHABAD [2018 (2) TMI 1395 - CESTAT NEW DELHI] and it has been held that these products are not intentionally manufactured but only arise during the process of refining of crude vegetable oil and therefore should be considered as waste and they are entitled to the benefit of exemption N/N. 89/1995-CE. The issue is no longer res-integra accordingly, the impugned order is set aside - Appeal allowed. Issues Involved:Whether the appellant is liable to pay excise duty on spent earth arising from refined vegetable oil.Analysis:The issue at hand is whether the appellant is liable to pay excise duty on spent earth arising from refined vegetable oil. The appellant argued that the issue had been settled in previous cases by CESTAT-Hyderabad and CESTAT-New Delhi. The tribunal examined whether the spent earth arising during the manufacture of vegetable refined oil, which is exempted, is subject to excise duty. The tribunal referred to previous cases and held that products like fatty acids, wax, and gums arising during the refining process should be considered waste and are entitled to exemption under notification 89/1995-CE. The tribunal emphasized that these products were not intentionally manufactured but emerged during the refining process. Thus, the impugned order was set aside, and the appeal was allowed.In the case of M/S. RICELA HEALTH FOODS LTD., M/S. J.V.L. AGRO INDUSTRIAL LTD., M/S. KISSAN FATS LIMITED, the tribunal discussed the distinction between waste and by-products. The appellant argued that the products in question were waste and should be exempted under notification 89/1995-CE. The Revenue contended that products capable of being sold for a significant amount cannot be considered waste. The tribunal held that the value a product may fetch should not determine whether it is waste or a by-product. It concluded that the products in question, such as gums, waxes, and fatty acids, were waste arising during the refining process and should be considered exempt under the notification. The tribunal highlighted that the process aimed to obtain refined vegetable oil by removing unwanted materials, making the incidental products waste. Therefore, the appellant was eligible for exemption under the notification.The tribunal's decision was based on the interpretation of whether the products arising during the refining process should be considered waste or by-products. It emphasized that the value a product may command should not be the determining factor. The tribunal concluded that the products like gums, waxes, and fatty acids were waste arising during the refining process and should be exempted under notification 89/1995-CE. The judgment set aside the impugned order and allowed the appeal, returning the files for further consideration on other points raised in the appeals.