2017 (12) TMI 276 - AT - Central Excise

N/N. 89/95-CE dated 18-5-1995 - the appellant cleared the soapstock which generated during the refined edible oil and it was exempted from the payment of excise duty vide N/N. 115/75-CEX dated 30-4-1975 - Held that - identical issue decided in the case of COMMISSIONER OF CENTRAL EXCISE, JALANDHAR Versus AG FLATS LTD. 2011 (7) TMI 968 - CESTAT, NEW DELHI , where it was held that the products, in question, have not been shown to be of no value or negligible value which have only to be discarded, the same would not be eligible for exemption under N/N. 89/95-C.E - benefit not allowed - appeal dismissed - decided against appellant.

Summary

Issues:
Confirmation of demand of duty on Soapstock cleared by the appellant.

Analysis:
The appellant, Shiv Shakti Extraction P. Ltd, filed an appeal against the confirmation of duty demand on Soapstock cleared by them. The issue was found to be similar to a previous Tribunal decision in the case of Commissioner of Central Excise, Jai Andhar Vs. A.G. Fats Ltd, which was upheld by the Hon'ble Supreme Court. The appellant had claimed benefit under Notification No.89/95-CE but was denied by the lower authority. The Tribunal discussed the distinction between 'by-product' and 'waste,' stating that waste is a by-product of no or very low value. The Tribunal cited previous cases to explain that by-products emerging during the manufacture of the main product cannot be considered waste if they hold some value. The Tribunal found that the products in question, including fatty acids, soap stock, waxes, and gums, had considerable market value, indicating they were not waste. Therefore, the Tribunal set aside some impugned orders and allowed the Revenue's appeals, while upholding other impugned orders and dismissing the appeals accordingly.

The Tribunal's decision was upheld by the Hon'ble Supreme Court, which led to the dismissal of the appeal on 31-10-17. The judgment emphasized the importance of demonstrating that the products in question are of no value or negligible value to be considered waste and eligible for exemption under the relevant notification. The case highlighted the significance of market value in determining whether certain products can be classified as waste or valuable by-products in the context of excise duty liability.

This comprehensive analysis of the judgment provides a detailed understanding of the issues involved, the legal principles applied, and the final decision rendered by the Tribunal and subsequently upheld by the Hon'ble Supreme Court.