TaxTMI 
TaxTMI 
2022 (4) TMI 363
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....med 5546095 Kgs and 729055 Kgs of Carbon Dioxide valued at Rs. 2,52,11,407/- and Rs. 32,85,619/- during the period from March, 2010 to December 2014 and from January 2015 to June 2015 respectively without paying the Central Excise Duty amounting to Rs. 29,46,375/- and Rs. 4,09,545/- respectively. Alleging that the appellants have contravened the provisions of Central Excise Rules, 2002 and that the benefit of Notification No.67/1995 dated 16.03.1995 was not available to the appellants for the final product (Beer) being not liable to duty that the duty on Carbon Dioxide so generated which was used captively was proposed to be recovered from the appellants along with interest and the proportionate penalties vide the show cause notice No.1202 dated 18.03.2015 and the show cause notice No.931 dated 09.11.2015 respectively. 2. The said show cause notices were first adjudicated by the Order-in-Original No.44-15/15-16 dated 30.03.2016 vide which the proposal was confirmed when the said matter was appealed, Commissioner (Appeals) vide Order-in-Appeal No.154-155/2018 dated 19.06.2018 had remanded back the matter for first carrying out the physical verification of Carbon Dioxide Plant of ....
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....ted on CO2 in terms of Notification No.67/1995 dated 16.03.1995 but since the CO2 is captively consumed for production of such final product which is not an excisable good, the exemption under said Notification is not available to the appellants. With these submissions learned DR impressed upon that there is no infirmity in the Order under challenge. The appeal is accordingly prayed to be dismissed. 6. After hearing both the parties, the considered opinion is as follows: The appellants, admittedly, are engaged in manufacture of alcoholic liquor for human consumption namely Beer excisable under Rajasthan State Excise Act. The duty has been demanded on Carbon Dioxide gas which evolves during the process of manufacture of Beer at fermentation stage which is a separate good under Central Excise Tariff Sub Heading No.28112190 of the First Schedule to Central Excise Tariff Act, 1985. Another undisputed fact apparent on record is that the process of manufacture of Beer consists of following stages: (i) Milling of salt. (ii) Crushing of malt. (iii) Addition of water. (iv) Boiling of the mixture known as "wort" (v) Fermentation at the stage....
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....Though the goods which are specified in First and Second Schedule to Central Excise Tariff Act, 1985 only are excisable goods: But alcoholic liquors including Beer find no mention in the said Schedules of Central Excise Tariff Act, 1985 because of the above Entry No.84. There is no denial that such alcoholic liquors are subject to Excise Duty under State Excise Law. The collection of duty and levy thereof is mentioned in Section 3 of Central Excise Act. The word "produced" or "manufacture" in said Section 3 has to be read as in relation to excisable goods resulting from such processes. Accordingly, it becomes clear that the provisions of Central Excise Act including the procedure for levy and collection of duty would apply only to such production or manufacturing process that result in production or manufacture of excisable good as mentioned in the Central Excise Act. Since the manufactured good in question is Beer, an alcoholic liquor for human consumption, the manufacturing process is out of the purview of Central Excise Act. Question of any intermediate product arising during such manufacturing process, irrespective find mentioned under Central Excise Tariff, cannot be made liab....
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....se Act does not apply. For this reason also Excise Duty cannot be levied upon so emitted CO2 irrespective it has been captively used in further process for manufacturing the impugned alcoholic liquor. 11. Coming to the second aspect of marketability, any good which is known to market attracts Excise Duty when cleared provided it has been manufactured. As already held above CO2 herein was not the product of manufacturing process. However, it is an admitted case that the appellants in addition of using CO2 captively were also purchasing CO2 for the same purpose of giving effervescence to the manufactured Beer. The marketability cannot be denied. Also Carbon Dioxide has a specific Tariff Entry under Central Excise Act cannot be denied. But the fact remains is that impugned CO2 is not a manufactured product, as held above, it fails to satisfy the dual test. Question of levy of Excise even under Central Excise Act does not arise. 12. Coming to the applicability of Notification No.67/95 dated 16.03.1995 based where upon the duty demand has been confirmed, it is observed that the said Notification was introduced with a view to exempt the manufacturer of the requirement of maintainin....