2018 (5) TMI 1197 - AT - Central Excise

Levy of duty - spend earth sludge, arising as a waste - manufacture of Edible Oil, Refined oil and Vanaspati Oil which are exempted goods - Held that - the identical case has come up before the Tribunal in a number of cases including the case of Larger Bench in M/s Ricela Health Foods Ltd & others V/s CCE, Chandigarh 2018 (2) TMI 1395 - CESTAT NEW DELHI , where it was held that these incidental products are nothing but waste arising during course of refining of rice bran oil and these cannot be considered as manufactured excisable goods - appeal allowed - decided in favor of appellant.

Summary

Issues:
- Appeal against Order-in-Appeal demanding duty on waste arising during the manufacture of exempted goods.

Analysis:
The appellant, engaged in manufacturing Edible Oil, Refined oil, and Vanaspati Oil, faced a demand for duty on waste arising during the production of refined oil, which they cleared. The Tribunal considered the case in light of previous judgments, including a Larger Bench decision, emphasizing that the value a product may fetch does not determine if it is waste or a manufactured good. The Tribunal noted that in the process of refining vegetable oil, unwanted materials are removed to obtain refined oil, resulting in incidental products like gums, waxes, and fatty acid with odor, which were deemed waste. Citing the Apex court's decision, the Tribunal concluded that these incidental products are not manufactured excisable goods but waste exempted under Notification No. 89/95-CE. This aligns with similar views expressed in past cases, where the concept of waste was not subject to excise duty, and exemptions were granted for products like gums and wax. Consequently, the impugned duty demand was set aside, and the appeal was allowed.

This judgment clarifies the distinction between waste arising during the manufacturing process and manufactured goods, emphasizing that the value a product may command does not determine its classification. It underscores that incidental products like gums and waxes, resulting from the refining process, are considered waste and exempt from excise duty under specific notifications. The decision aligns with previous rulings and provides a clear interpretation regarding the treatment of waste in excise matters, ensuring consistency and adherence to legal principles.