2009 (10) TMI 337 - AT - Central Excise

Tribunal Allows Appeal on Waiver of Pre-Deposit; Refining Process Alters Product Classification

CEE JEE LUBRICANTS Versus COMMISSIONER OF C. EX. & CUSTOMS, COCHIN

CEE JEE LUBRICANTS Versus COMMISSIONER OF C. EX. & CUSTOMS, COCHIN - 2010 (251) E.L.T. 439 (Tri. - Bang.) Issues:1. Waiver of pre-deposit of confirmed amounts by Adjudicating Authority.2. Classification and chargeability of re-refined lubricating oils under the Central Excise Tariff Act, 1985.3. Denial of SSI exemption to the appellant for clearances in the financial year 2006-07.Analysis:1. The stay petition sought the waiver of pre-deposit of confirmed amounts by the Adjudicating Authority. The Tribunal accepted the request due to an identical issue listed for final disposal, waiving the condition and taking up the appeal for disposal alongside another appeal. This decision was made by Members M.V. Ravindran and P. Karthikeyan.2. The issue revolved around whether the re-refining process undertaken by the appellant amounts to manufacture and if re-refined lubricating oils are classifiable and chargeable to duty under Chapter Heading 27101980 of the Central Excise Tariff Act, 1985. The Revenue issued a Show Cause Notice demanding duties, which was confirmed by the Adjudicating Authority. The appellant argued that the refining process did not change the essential characteristics of the oils, citing relevant tribunal decisions supporting their stance. The Tribunal, after considering submissions from both sides and perusing records, found that the appellant's processing rendered the used oil fit for use as lubricating oils, changing its characteristics and use, thereby attracting Chapter Note 4 of Chapter 27. However, the Tribunal referenced a previous decision where a similar process was not considered as manufacture, leading to the setting aside of the impugned orders and allowing the appeals.3. The denial of SSI exemption to the appellant for clearances in the financial year 2006-07 was based on the confirmation of demand by the Adjudicating Authority. The appellant argued for setting aside both Orders-in-Original, emphasizing that the refining process did not amount to manufacture. The JCDR contended that the reprocessing of waste oil made the product marketable to consumers, falling under Chapter Note 4 of Chapter 27. The Tribunal, after considering the arguments and previous decisions, concluded that the impugned orders were unsustainable and set them aside, allowing the appeals with consequential relief, if any. The operative portion of this order was pronounced in open court at the conclusion of the hearing.