TaxTMI 
TaxTMI 
2024 (9) TMI 1593
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....thereof a concentrated solvent emerges which is called Mother Liquor. The Mother Liquor so emerged is further processed for purification, in this process it gets segregated in usable solvent and non-usable solvent. The usable solvent is further used in the manufacturing of bulk drugs of various batches and non-usable solvent. The non-usable solvent is further cleared by the appellant in Domestic Tariff Area on payment of applicable rate of duty. 2. The department during the course of audit entertained a view that the appellant cleared by-product (spent solvent) in Domestic Tariff Area at concessional rate of duty by availing benefit of Notification No. 23/2003-CE dated 31.03.2003. A show cause notice dated 25.09.2015 came to be issued demanding Central Excise duty amounting of Rs. 45,42,195/- for the period 2009-10 to 2013-14. The provisions with regard to penalty and interest have also been invoked in the show cause notice. 3. The basic contention of the department was that the spent solvent emerging during the manufacturing process of bulk drugs is a by-product and not a waste and scrap and therefore, the appellant has wrongly availed the benefit of exemption Notification No. 2....
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....- "6. The Counsel for APL relies on Indian Oil Corporation Ltd. v. Collector of Central Excise, Baroda - 2006 (202) E.L.T. 37 (S.C.) and CCE, Hyderabad v. Novapan Industries Ltd. - 2007 (209) E.L.T. 161 (S.C.) and submits thast when the issue of excisability of spent solvent is already decided in the earlier cases in respect of the same assessee or when a similar question is decided by the Commissioner (Appeals) or the CESTAT, the department, having not filed an appeal against the earlier judgment, cannot reagitate the matter. He also relies on various judgments in Collector, Central Excise, Bombay v. S.D. Fine Chemicals Ltd. - 1995 (77) E.L.T. 49 (S.C.), Collector of Central Excise, Baroda v. United Phosphorus Ltd. - 2000 (117) E.L.T. 529 (S.C.), CCE, Chandigarh-I v. Markfed Vanaspati & Allied Industries - 2003 (153) E.L.T. 491 (S.C.), Collector of Central Excise, Patna v. Tata Iron & Steel Co. Ltd. - 2004 (165) E.L.T. 386 (S.C.) and CCE, Hyderabad-III v. Natco Pharma Ltd. - 2007 (208) E.L.T. 573 (Tri.) and contends that the spent solvent does not satisfy the twin tests laid down by the Supreme Court in Markfed Vanaspati & Allied Industries and S.D. Fine Chemicals Ltd., and, the....
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....s Ltd., 2001 (130) E.L.T. 193, cannot be permitted to take the opposite stand in this case. If we were to permit them to do so, the law will be in a state of confusion and will place the authorities as well as the assesses in a quandary. Birla Corporation Ltd. (supra) is being followed consistently. Since the point involved in the present case is identical to the point involved in Hindustan Petroleum Ltd., (supra) and the department having accepted the principle laid down in Hindustan Petroleum Corporation Ltd., (supra), the department cannot be permitted to take a different stand in the present appeals. 9. Yet again, in Novapan Industries Ltd., following Birla Corporation Ltd., v. CCE and Jayaswals Neco Ltd., v. CCE, Nagpur the Supreme Court reiterated the law that, "the department having accepted the principles laid down in the earlier case cannot be permitted to take a contra stand in subsequent cases". 10. In CCE, Hyderabad v. Aurobindo Pharma Ltd. the learned Tribunal considered the question, whether spent solvent (spent methanol, in that case) is liable to duty. It was held as follows. On a careful consideration, we notice from the extracted order of the Commission....
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....he Central Excise of the appellant's factory has categorically recorded that bio-manure is solid waste which is filled in gunny bags and removed from the factory without payment of duty. There is also no contravention of the fact that the solid waste is generated in fermentation process of manufacturing of 'Rifampicin'. The said process is made aware to department. There is no finding on such factual matrix. In the absence of any contravention of this factual matrix, the duty demanded on the bio-manure as a waste solvent from the appellant seems to be not in accordance with law. 7.1 Be that as it may, we find strong force in the contention of the learned Advocate that the Hon'ble High Court of Bombay in the case of Hidalgo Industries Ltd. (supra) were considering similar issue of duty liability on dross and skimming of aluminium, zinc or other non-ferrous sheets arising during the course of manufacturing; Revenue had invoked provisions of Section 2(d) of Central Excise Act, 1944, for demand of duty, was upheld by Larger Bench of this Tribunal. Their Lordships while upturning the Larger Bench's decision held as under :- "22. That the Revenue does not wish to abide by them would....