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Issues: Whether spent solvent arising during manufacture of bulk drugs is liable to central excise duty and whether clearance in the Domestic Tariff Area could be denied the benefit of Notification No. 23/2003-CE dated 31.03.2003 on the footing that the material was a dutiable by-product and not waste.
Analysis: The dispute was covered by earlier decisions holding that spent solvent emerging in the manufacture of bulk drugs is not a marketable excisable product and that such waste solvent is not liable to duty. The Tribunal relied on the Andhra Pradesh High Court decision in Aurobindo Pharma, which had already been affirmed by the Supreme Court, and on its own later decision in Sandoz Pvt. Limited. The governing principle applied was that where the department has accepted the earlier ruling on an identical issue, it cannot take a contrary stand in subsequent matters. The record also treated the material as waste solvent emerging in the manufacturing process, not as a dutiable by-product satisfying the conditions of the exemption dispute.
Conclusion: The spent solvent was held not dutiable and the denial of the exemption-based treatment could not be sustained; the appeal succeeded in favour of the assessee.
Ratio Decidendi: Spent solvent emerging in the manufacture of bulk drugs, when not marketable as a distinct excisable product, is not liable to central excise duty, and the revenue cannot re-agitate an identical issue after acceptance of the earlier binding decision.
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