Spent solvents in bulk drug manufacturing not excisable when notices rely only on manufacture under the Central Excise Act

Recovered spent solvents removed from a bulk drug manufacturing factory were held not exigible to central excise duty because earlier proceedings on the same facts had already treated the mixed solvents as non-excisable under Section 2(f) of the Central Excise Act, 1944. The later demand also failed because the show cause notices relied only on manufacture under Section 2(f) and did not invoke Section 2(d). The liability therefore remained covered by the prior binding view, and the duty demand could not survive.

---

---

Issues: Whether the recovered mixture of spent solvents removed from the factory in the course of manufacturing bulk drugs was excisable and liable to central excise duty.

Analysis: The dispute concerned spent solvents generated after repeated use in the manufacture of bulk drugs. The issue had already been decided in earlier proceedings on the same facts, holding that such mixed solvents did not amount to excisable goods under Section 2(f) of the Central Excise Act, 1944. For the later period, the demand also could not be sustained because the show cause notices proceeded only on the basis of manufacture under Section 2(f) and did not invoke Section 2(d). The liability raised against the appellant was therefore covered by the earlier binding view and did not survive.

Conclusion: The recovered spent solvents were not liable to central excise duty, and the demand was unsustainable.

Final Conclusion: The impugned order was set aside and the appeal succeeded, resulting in complete relief to the appellant.

Ratio Decidendi: Recovered spent solvents arising from repeated use in manufacture are not exigible to duty unless they answer the statutory test applied to excisable goods under the relevant provision invoked in the notice.

---