2018 (4) TMI 720 - AT - Central Excise

N/N. 89/1995-CE dated 18.05.1995 - benefit of notification on waste items being Fatty acids, Wax, Gums and Spent earth - manufacture of exempted goods - whether the appellants/respondents manufacturing Refined Vegetable Oil which is exempted under Notification, whether they are entitled to exemption on the items being Fatty acids, Wax, Gums and Spent earth under N/N. 89/1995-CE dated 18.05.1995? Held that - similar issue decided in the case of M/s Ricela Health Foods Ltd., M/s J.V.L. Agro Industrial Ltd., M/s Kissan Fats Limited Versus CCE, Chandigarh, Allahabad 2018 (2) TMI 1395 - CESTAT NEW DELHI , where it was held that the removal of unwanted materials resulting in products like gums, waxes and fatty acid with odour cannot be called as a process of manufacture of these gums, waxes and fatty acid with odour. These cannot be considered as anything other than waste and as such will be covered by the exemption N/N. 89/95-CE. The manufacturer-assessees herein are entitled to exemption under the N/N. 89/1995-CE dated 18.05.1995 on their waste generated in the course of manufacture such as Fatty acids, Wax, Gums and Spent earth. Appeal dismissed - decided against Revenue.

Summary

Issues: Whether manufacturer-assessees are entitled to exemption on items such as Fatty acids, Wax, Gums, and Spent earth under Notification No. 89/1995-CE dated 18.05.1995.

The judgment analyzed whether the manufacturer-assessees were eligible for exemption under Notification No. 89/1995-CE for waste generated during the manufacturing process. The Tribunal referred to a previous Larger Bench decision that emphasized the distinction between waste and manufactured goods. The Tribunal highlighted that the products in question, namely gums, waxes, and fatty acids, were by-products of the refining process to obtain refined rice bran oil. The Tribunal rejected the Revenue's argument that the products, if saleable, could not be considered waste, emphasizing that the value of a product does not determine its classification as waste or a by-product. The Tribunal concluded that the incidental products were waste arising during the refining process and, based on the Apex Court's precedent, could not be considered as manufactured excisable goods. Therefore, the manufacturer-assessees were deemed eligible for exemption under the notification.

The judgment further stated that based on the Larger Bench's opinion, the manufacturer-assessees were entitled to exemption under Notification No. 89/1995-CE for waste generated during the manufacturing process, including Fatty acids, Wax, Gums, and Spent earth. The appeals filed by the assessees were allowed, while those filed by the Revenue were dismissed. The assessee-appellants/respondents were granted consequential benefits in accordance with the law.