2013 (12) TMI 665 - AT - Central Excise

Impure Spirit and carbon-di-oxide generated during re-distillation of Ethyl alcohol - Revenue was of the view that the denatured spirit and carbon-di-oxide are dutiable items Waiver of Pre-deposit Held that - Relying upon SCI India Ltd. v. Commissioner of Central Excise, Patna 2007 (6) TMI 152 - CESTAT, KOLKATA - ethyl alcohol for human consumption is not in the category of exempted goods and do not fall within heading 22.04 as the same are not excisable at all - Prima facie, the appellant s claim that rectified spirit is non-excisable and only denatured ethyl alcohol can be considered excisable even though it has not been dealt by them has considerable force - the appellant has made out a prima facie case for waiver of amount Pre-deposits waived till the disposal Stay granted.

Summary

Issues:
1. Duty liability on denatured spirit and carbon-di-oxide.
2. SSI exemption claim for ENA clearance.
3. Pre-deposit requirement for excise duty.

Analysis:
1. The appellant, engaged in ethyl alcohol manufacture, faced duty demands on denatured spirit and carbon-di-oxide sales. The Revenue contended these items were dutiable, leading to a duty demand confirmation of Rs. 32,47,555/- with interest and a penalty under Section 11AC of the Central Excise Act, 1944. The appellant's argument for SSI exemption was refuted due to the inclusion of ENA clearances in the aggregate clearances calculation, exceeding Rs. 3,00,00,000/-. Consequently, duty liability was imposed for the period from 1-4-2003 to 31-3-2006.

2. The Tribunal deliberated on the levy of excise duty by State and Centre, citing the jurisdiction for alcohol excise duty. The appellant referenced the SCI India Ltd. case, highlighting ethyl alcohol for human consumption as non-excisable, not falling under exempted goods. The Ugar Sugar Works Ltd. case was also considered, emphasizing the non-excisability of rectified spirit. The Tribunal noted the Tariff's description under Chapter 22, indicating that only denatured ethyl alcohol could be considered excisable, supporting the appellant's claim of non-excisability of rectified spirit. Consequently, a prima facie case for waiver of pre-deposit and stay against recovery was established, granting relief to the appellant during the appeal's pendency.