Reclaimed fuel oil from waste oil was held not to be manufacture absent a specific deeming fiction.

Processing waste oil by filtration, centrifuging, distillation and blending did not amount to manufacture for central excise purposes because the activity did not create a new excisable product. The Tribunal followed earlier authority on recycling and re-refining of waste oil, holding that reclaimed fuel oil remained the same product and was not covered by the deeming fiction applicable to lubricating oils under Chapter Note 4 of Chapter 27. As no separate statutory note treated reclaimed fuel oil as manufacture, the duty demand was unsustainable and the impugned orders were set aside.

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Issues: Whether the processing of waste oil by filtration, centrifuging, distillation and blending amounts to manufacture so as to attract central excise duty.

Analysis: The appeals concerned reclaimed fuel oil obtained from waste oil subjected to purification processes. The decisive question was whether such processing brought into existence a new excisable product. The Tribunal noted that the issue was already covered by a prior decision dealing with similar recycling and re-refining of waste oil, where reclaimed fuel oil was held not to fall within the deeming fiction applicable to lubricating oils under Chapter Note 4 of Chapter 27. The reasoning accepted that the circular on re-refined used or waste oil addressed lubricating oils and not reclaimed fuel oil, and that no separate chapter note treated the present product as manufacture. Following that reasoning, the Tribunal held that the processed oil remained reclaimed fuel oil and no manufacture was established.

Conclusion: The processing of waste oil did not amount to manufacture and the duty demand was not sustainable.

Final Conclusion: The impugned orders were set aside and the appeals succeeded with consequential relief according to law.

Ratio Decidendi: Reclaimed fuel oil obtained from waste oil by purification or recycling processes is not dutiable as manufacture unless the statute specifically creates a deeming fiction covering that product.

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