2017 (11) TMI 598 - AT - Central Excise

Benefit of N/N. 8/2003-CE dated 01/03/2003 - clearance of acid oil as waste - Held that - in the case of State of Gujarat Vs. Raipur Manufacturing Co. Ltd., 1966 (9) TMI 82 - SUPREME COURT OF INDIA it was observed that the concept of waste is not a subject matter of excise duty as per the exemption N/N. 89/95-CE. So, the exemption was held to be available to gums/ waxes and recovered oil/fatty acids in the said case - appeal allowed - decided in favor of appellant.

Summary

Issues:
- Appeal against order disallowing benefit of Notification No.8/2003-CE
- Availability of benefit of Notification No.89/95-CE
- Classification of acid oil as waste or by-product
- Interpretation of exemption under Notification No.89/95-CE
- Comparison of relevant case laws

Analysis:
The appellant filed an appeal against the order disallowing the benefit of Notification No.8/2003-CE for clearing acid oil without duty payment. The dispute period was December 2007 to May 2009. The appellant, engaged in manufacturing Refined and Vanaspati Oil, claimed exemption for the acid oil arising as waste during the manufacturing process. The lower authorities initially denied the benefit of Notification No.89/95-CE to the appellant. The appellant argued that the acid oil should be considered waste and eligible for exemption based on precedents like Arihant Solvex Pvt. Ltd. Vs. CCE, Jaipur, and CCE, Hyderabad Vs. Shree Siddhi Vinayaka Agro Extractions (P) Ltd.

On the other hand, the Revenue relied on the decision in CCE, Jalandhar Vs. A.G. Flats Ltd., affirmed by the Apex court in A.P. Solvex Ltd. Vs. Commissioner. However, the Tribunal in Maheshwari Solvent Extraction Ltd. Vs. CCE, Nagpur, examined and distinguished this decision. The Tribunal also referred to the case of State of Gujarat Vs. Raipur Manufacturing Co. Ltd., highlighting that the concept of waste is not subject to excise duty under the exemption Notification No.89/95-CE. The exemption was upheld for gums/waxes and recovered oil/fatty acids in that case.

In light of the legal precedents and settled position, the Tribunal set aside the impugned order and allowed the appeal, granting the appellant the benefit of the exemption. The appeal filed by the appellant was thus allowed, concluding the matter in favor of the appellant.