2018 (7) TMI 671

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...., Refined Rice Bran Oil, Vanaspathi and Bakery shortening/ Margarine in their units situated at Iyappanthangal and Arakonam Road, Ulundai Village. During the manufacture of the above products, by products namely; fatty acid, soap stock, spent earth emerged which according to the department was liable to excise duty and therefore the appellants are not eligible for SSI exemption benefit. SCN was issued proposing demand of duty along with interest and also for imposing penalties. After due process of law, the adjudicating authority confirmed the demand, interest and imposed penalties. Aggrieved, the appellants are now before the Tribunal. 3. On behalf of the appellant, Ld. Counsel, Ms. K. Nancy submitted that the department has demanded du....

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.... products arising out of a manufacturing process. The appellants are engaged in converting crude rice bran oil into refined rice bran oil. In effect the processes undertaken by them are towards this intended final product. For producing refined rice bran oil, the gums and waxes available in the crude rice bran oil are to be removed by degumming and de-waxing. Thereafter by a process of deacidification / De-odourisation, by distillation the refined oil is obtained. In this final process fatty acid distillate (fatty acid with odour) is obtained as a waste. As can be seen the gums, waxes and fatty acid distillate are emerging due to removal / refining process of crude rice bran oil. As already noted the process is to obtain refined rice bran o....

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....se of manufacture. The process of manufacturing refined vegetable oil is essentially by removing the unwanted materials that were present in the crude vegetable oil so that a refined vegetable oil can be obtained. In this process of refining, the unwanted materials are removed. Hence, we are of the considered view that the removal of unwanted materials resulting in products like gums, waxes and fatty acid with odour cannot be called as a process of manufacture of these gums, waxes and fatty acid with odour. The process of manufacture is for refined rice bran oil. As such, we note that these incidental products are nothing but waste arising during course of refining of rice bran oil and applying the ratio of Apex Court, as discussed above, t....