2015 (9) TMI 465 - SC - Central Excise

Intermediate product - manufacture of sugar syrup - captive consumption - evenue wanted to impose excise duty thereon on the ground that it contains 75.2% sugar contents and, therefore, was to be classifiable under Heading 1702 - Held that - it is not in dispute that in any case the said product is exempted from duty as per Notification No. 217/86-CE dated 02.04.1986 as amended by Notification No. 79/91-CE dated 25.7.1991. - appeal dismissed - decided against the revenue.

Summary

Issues:
1. Classification of sugar syrup for excise duty.
2. Applicability of exemption notification on the product.

Classification of sugar syrup for excise duty:
The case involved the classification of sugar syrup for excise duty purposes. The respondent manufactured sugar syrup as an intermediate product used in aerated water production. The Revenue sought to impose excise duty based on the sugar content exceeding 65%, classifying it under Heading 1702. However, the assessee argued that the sugar content was below 65%. The Tribunal noted that regardless of the sugar content, the product was exempt from duty under Notification No. 217/86-CE as amended by Notification No. 79/91-CE. The Tribunal concurred that the demand for duty on sugar syrup consumed captively could not be sustained, as it would be exempted under the mentioned provisions. The counsel for the Revenue did not dispute this position, leading to the dismissal of the appeal by the Supreme Court.

Applicability of exemption notification on the product:
The central issue also revolved around the applicability of the exemption notification on the sugar syrup manufactured by the respondent. The Tribunal's observation highlighted that the product, even if considered excisable, would be exempted under the provisions of Notification No. 217/86-CE. The Supreme Court, after considering this fact and the lack of merit in the appeal, dismissed the case. The judgment emphasized the importance of the exemption notification in determining the duty liability on the sugar syrup, ultimately leading to the rejection of the Revenue's claim for excise duty on the product.