2016 (11) TMI 1129 - AT - Central Excise

Emergence of fatty acid & wax - manufacture - wastage - Interpretation of exemption notification - Whether the appellant engaged in the manufacture of Rice Bran Oil & Solvent Extraction Industry and further refined the same to make it edible oil in which process two bye-products/waste products arise, namely, fatty acid & wax? - Whether the appellant is entitled to exemption on fatty acid and waxes under Notification No. 115/75-CE dated 30-04-1975? - Held that - we find that in view of the law clarified by the Hon ble Supreme Court in the case of Bombay Oil Industries Ltd. Versus Commissioner of Central Excise 1997 (2) TMI 119 - SUPREME COURT OF INDIA , Oil Mill & Solvent Extraction Industry are eligible for exemption under Notification No. 115/75-C.E. dated 30-04-1975 - appeal allowed - decided in favor of appellant.

Summary

Issues: Whether the appellant is entitled to exemption on fatty acid and waxes under Notification No. 115/75 dated 30-04-1975.

Analysis:
1. The appellant, a manufacturer of Rice Bran Oil, claimed exemption under Notification No. 115/75 for the fatty acid and wax obtained as by-products during the refining process. The Show Cause Notice was issued, questioning the fulfillment of the notification's requirements.

2. The Adjudicating Authority rejected the claim of exemption, citing a Tribunal ruling that the appellant did not fall under the category of Oil Mill & Solvent Extraction Industry as they did not undertake oil extraction from seeds or solvent extraction techniques. A demand for central excise duty and penalty was confirmed.

3. The appeal before the Commissioner (Appeals) was dismissed, upholding the Adjudicating Authority's decision. The appellant then referred to a Supreme Court case involving Bombay Oil Industries Ltd., where the Court clarified that goods manufactured in a Solvent Extraction Plant are eligible for exemption under Notification No. 115/75.

4. The appellant argued that the Supreme Court's ruling supported their claim for exemption as their goods were manufactured in a Solvent Extraction Plant, falling within the scope of the notification. The appellant urged for the appeal to be allowed based on this clarification.

5. Considering the Supreme Court's interpretation, the Tribunal found that both Oil Mill & Solvent Extraction Industry are eligible for exemption under Notification No. 115/75. Consequently, the appeal was allowed, and the impugned order was set aside, granting the appellant consequential benefits.