TaxTMI 
TaxTMI 
1997 (7) TMI 268
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.... Oil and residues classifying under sub-heading 1507.00. 3. While approving the classification list, A.C. had denied the benefit of Notification No. 217/86 vide order-in-original No. FII/45/88, dated 22-8-1988. Hence, the respondents filed an appeal before Collector (A) and the Collector (A) held that the physical presence of the input in the final product is not necessary. Further he pointed out that "the real difficulty would however arise for the reason that the steam so produced and electricity so generated would not be 100% consumed in the production of end products. Certain diversion of electricity so generated is generally seen in every manufacturing unit. If it is so, it would not be possible to quantify the exemption and this....
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....or such residues, which are not directly used in or in relation to manufacture of soap in question. Burning of Rice Bran Residue, as claimed by the respondents, cannot be said to be a mode of destruction making the company entitled for remission of duty. 7. Ld. Representative of the appellants stated the appeal filed by the department against the order of Collector (A) is misconceived. The background facts of the case are : (i) The respondents had filed a classification list dated 12-11-1987 classifying Rice Bran Residue under sub-heading No. 1507.00 and claiming exemption under Notification No. 217/86, dated 2-4-1986 (as amended). (ii) The classification list was, inter alia, approved vide AC's order-in-original dated 22....
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....by the respondents and if the detailed verification of the statistics w.r.t. primary records maintained confirm the position, there is no reason for the A.C. to deny the exemption. A perusal of the above facts show that the department has chosen to file instant appeal on second thoughts. The issue whether exemption of 217/86 is available to the respondents ought to have been agitated by filing an appeal against the order-in-appeal No. SKM/2207/89/B-II, dated 3-11-1989. Not having done so, the department cannot take liberty to file an appeal against order-in-appeal No. ADN/966/90/B-I, dated 4-12-1990 which merely directed the A.C. to carry out verification in strict compliance of the earlier order-in-appeal. The appeal of the department is....
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.... not arise as rice bran residue is not burnt and destroyed, but is used as a fuel substitute in boiler and cogeneration plant to generate steam and electricity for being used in the manufacture of final product, soap. The respondents are therefore not seeking any remission of duty but benefit of Notification No. 217/86. 11. We have considered the above submissions. We observe that the appeal filed by the department against the impugned order passed by Collector (A) is evidently misconceived inasmuch as in effect it merely directs the A.C. to comply with the earlier order-in-appeal as evident from the operative portion of the impugned order-in-appeal which reads as follows : "I observe that the order of the Asstt. Collector virtually ....