2013 (12) TMI 504 - AT - Central Excise

Denial of the benefit of Notification No. 89/95 - Duty demand on by-products Waiver of Pre-deposit- By-products could be considered as waste or not Held that - Representation made to CBEC which is based on the survey that is ongoing - Reference has also been made to an old Circular of the Board viz. No. 684/7/2002-CX., dated 26-12-2002 which stipulated that, whenever a survey was floated for issuing/examining Notification under Section 11C of the Central Excise Act, no coercive action should be taken for recovery of arrears/duties - the appellant is claiming the benefit of this Circular in view of the ongoing survey based on their representation dated 27-1-2012 Pre-deposits waived till the disposal Stay granted.

Summary

Issues:
- Applicability of Notification No. 89/95-C.E. dated 18-5-1995 to certain by-products generated during refining of crude rice bran oil.
- Whether the by-products can be considered as waste for exemption purposes.
- Claim for waiver and stay against the adjudged dues based on ongoing survey and representation to the Central Board of Excise & Customs.
- Reference to Circular No. 684/7/2002-CX dated 26-12-2002 for non-coercive recovery during survey for issuing/examining Notifications under Section 11C of the Central Excise Act.

Analysis:

The judgment by the Appellate Tribunal CESTAT Bangalore pertained to applications seeking waiver and stay against adjudged dues concerning certain by-products, namely fatty acids, wax, and gum, generated during the refining of crude rice bran oil. The demand for duty arose due to the denial of the benefit of Notification No. 89/95-C.E., dated 18-5-1995, which provided exemption to wastes, parings, and scrap. The pivotal issue revolved around whether these by-products could be categorized as waste for the purpose of availing the exemption. The lower authorities ruled against the appellant, leading to the imposition of duty.

During the proceedings, it was revealed that a representation dated 27-1-2012 submitted by the Solvent Extractors Association of India, of which the appellant was a member, to the Central Board of Excise & Customs was under consideration. This representation sought exemption from duty payment on the by-products based on a purported existing practice related to the assessment of such by-products. Additionally, a survey was initiated to ascertain the validity of this claimed practice. Notably, the appellant referenced Circular No. 684/7/2002-CX dated 26-12-2002, which mandated no coercive action for recovery of arrears/duties during the conduct of surveys for issuing or examining Notifications under Section 11C of the Central Excise Act.

In light of the ongoing survey and the representation to the Board, the Tribunal found merit in granting the waiver and stay as requested by the appellant. The decision was influenced by the fact that the Board itself was against coercive recovery proceedings in this particular case. Consequently, the Tribunal ordered the waiver and stay in favor of the appellant, emphasizing the unique circumstances and the Board's stance on the matter.