2006 (3) TMI 433

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....nt/distilled solvents which are over and above their requirement for manufacture, were sold to different customers. As they had not paid duty, they were charged for clandestine removal and demands confirmed. 2. The Commissioner in her Order-in-Appeal No. 78 and 79/03 in the case of M/s. Vorin Laboratories Ltd., Hyderabad has given a detailed reason to hold that the spent solvents were not dutiable and they are not goods. The detailed order passed in Order-in-Appeal No. 99/05 dated 28-6-2005 in the case of CCE v. Herren Drugs & Pharmaceutical Ltd. in para 5 onwards are reproduced. 5. I have gone through the case records and written submissions made by the appellants and observed the Hon'ble Tribunal in the case of Collector of Central Excise & Customs, Pune v. Industrial Oxygen Company Ltd. reported in 1998 (102) E.L.T. 332 (Tribunal) held that "Lime sludge - Durability - Lime sludge arising during manufacture of Acetylene Gas from Calcium Carbide - Fact that it does fetch some price, by itself will not suffice as a criterion to bring sludge in the net of excise - No evidence that material is treated as commodity in the normal course - Section 2(d) and 3 of the Central E....

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.... and no objection was raised at that time there is no evidence of under valuation. The demand of duty, recovery of interest under Section 11AB and imposition of penalty under Section 11AC of the Act not sustainable and personal penalty also not warranted. There is no willful mis-statement or suppression of facts or contravention of provisions of Central Excise Act, 1944 or the Rules made there under with intent to evade payment of duty on their part. There is no under valuation of the goods, waste solvent and waste methanol alleged in the notice. As such invocation of the extended period of 5 years under proviso to Section 11A(1) of demanding duty from January 1995 in this case is not sustainable. In the case of M/s. Lubrichem Industries v. CCE, Bombay reported in 1994 (73) E.L.T. 257 (S.C.), M/s. Tamilnadu Housing Board v. CCE, Madras reported in 1994 (74) E.L.T. 9 (S.C.), M/s. Cosmic Dye Chemicals v. CCE, Mumbai reported in 1995 (75) E.L.T. 721 (S.C.) and Pushpam Pharmaceuticals v. CCE, Mumbai reported in 1999 (78) E.L.T. 401 (S.C.). In view of the above, the demand for the period from 1/95 to 9/99 was hit by time limitation under Section 11A(1) of the Central Excise Act....

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....again and again and sold to the outsiders cannot be considered as new goods. In this regard, he relies on the judgment of the Tribunal affirmed by the Apex Court in the case of S.D. Fine Chem (Pvt.) Ltd. v. Collector reported in 1997 (91) E.L.T. 610, wherein it has been held that purification of bought out chemicals through distillation or recrystallisation does not amounts to manufacture and no new goods come into existence. The Tribunal relied on large number decisions of Supreme Court and the Tribunal ruling which has been affirmed by the Supreme Court. The learned Counsel relies on the judgments rendered in the case of New Sharrock Mills v. CCE, Vadodara reported in 2005 (190) E.L.T. 35 (Tri.-Mumbai) wherein the Tribunal has held that recovery of caustic soda from spent caustic soda lye by increasing concentration of spent caustic soda lye does not amount to manufacture inasmuch as caustic soda itself was initial product used in mercering the fabrics. The Tribunal took the view that no product, different and distinct from initial product emerged in the process. The learned Counsel submitted that the issue being covered by the cited judgments, there is no infirmity in the Commis....

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....te of the earlier two decisions in the case of Commissioner, Central Excise v. Bakul Aromatics & Chemicals Ltd. -1989 (43) E.L.T. 758 and S.D. Fine Chemicals Pvt. Ltd. v. Commissioner, Central Excise - 1997 (91) E.L.T. 610, held that as the resultant product has the same characteristics except for the concentration, it is not possible to say that change in concentration would result in emergence of new product. Similarly in the case of Commissioner v. Yash Pharma Chemicals (Bombay) Pvt. Ltd. - 2001 (135) E.L.T. 1206 (Tri. - Del.) it was held, after taking note of the precedent decisions that howsoever elaborate the process undertaken is, the test for determination whether manufacture has taken place or not in the sense, Central Excise law is whether new products having different name, use and character has come into existence or not. Accordingly, the process of recovery of tartaric acid from L2 ABT was held as not manufacturing process as tartaric acid was already present in initial product L2 ABT and the entire process was originally started with the product Tartaric acid. By applying the above tests to the present case, we are of the view that the recovery process undertaken by t....