2017 (9) TMI 769 - AT - Central Excise

Benefit of N/N. 67/1995-CE - case of Revenue is that in the manufacture of denatured spirit, rectified spirit got generated and rectified spirit is not specified in the first schedule to Central Excise Tariff Act, 1985, denying the benefit of notification - Held that - this Tribunal in the case of Bajaj Hindusthan Sugar Ltd. 2016 (8) TMI 386 - CESTAT ALLAHABAD has held that Ethyl Alcohol and rectified spirit are one and the same - SCN not sustainable - appeal allowed - decided in favor of appellant.

Summary

Issues:
1. Interpretation of Notification No. 67/1995-CE for exemption claim.
2. Entitlement to Cenvat Credit for inputs used in manufacturing non-excisable goods.
3. Validity of show cause notice regarding Central Excise Duty and Cenvat Credit recovery.

Analysis:
1. The appeal challenged Order-in-Original No. 53/COMMR/CX/2014-15 concerning the manufacturing activities of Sugar, Molasses, Rectified Spirit, and Denatured Spirit. The dispute arose from the use of molasses in the refinery for denatured spirit production and claiming exemption under Notification No. 67/1995-CE. The show cause notice alleged that rectified spirit, not listed in the Central Excise Tariff Act, was generated during the manufacturing process, disqualifying the appellant from the exemption and Cenvat Credit. The demands were upheld in the impugned order with penalties imposed.

2. The appellant argued citing a precedent (Bajaj Hindusthan Sugar Ltd. v/s Commissioner of Central Excise, Lucknow) that Ethyl Alcohol and rectified spirit are synonymous, thus challenging the validity of the show cause notice. The appellant's counsel contended that the Tribunal's decision in the aforementioned case settled the issue in their favor. The learned AR for the respondent concurred with the appellant's position, acknowledging the precedent's relevance.

3. Upon review, the Tribunal found that the show cause notice's premise, asserting rectified spirit's absence from the Central Excise Tariff Act, was untenable. Relying on the precedent, the Tribunal concluded that Ethyl Alcohol and rectified spirit are identical. Consequently, the impugned Order-in-Original was set aside, and the appeal was allowed, granting the appellant appropriate relief in accordance with the law.

This judgment clarifies the interpretation of relevant provisions, emphasizing the importance of legal precedents in resolving disputes and ensuring consistency in decision-making within the realm of excise and taxation laws.