2018 (6) TMI 564 - AT - Central Excise

Exemption to Intermediate goods - N/N. 67/1995-CE dated 16.03.1995 - intermediate product, sugar syrup, captively consumed, in the manufacture of biscuits - Demand of Central Excise Duty - Held that - The Co-ordinate Bench in the case of Rishi Bakers Pvt. Ltd., Kanpur 2015 (4) TMI 893 - CESTAT NEW DELHI has held that there was no evidence to prove that sugar syrup captively consumed is classifiable under Tariff Item No. 17029090, nor there is any evidence to prove that the goods in question, in the form in which they come into existence in the appellants factory, are marketable. The sugar syrup coming into existence during manufacture of biscuits and captively consumed, does not attract Central Excise duty for the reason that there is no evidence that the same is marketable - appeal allowed - decided in favor of appellant.

Summary

Issues:
Classification of sugar syrup for Central Excise Duty.

Analysis:
The case involved the classification of sugar syrup for Central Excise Duty. The appellants, who were biscuit manufacturers, used sugar syrup in the manufacturing process. The Revenue contended that the sugar syrup was classifiable under Tariff Item No. 17029090. Prior to 03.05.2007, the final products attracted Central Excise Duty, exempting the intermediate products under Notification No. 67/1995-CE. However, post 03.05.2007, goods with MRP less than ?100/kg were exempted under Notification No. 22/2007-CE, rendering the benefit of Notification No. 67/1995-CE on sugar syrup as an intermediate product inapplicable. Show cause notices were issued demanding Central Excise duty on the sugar syrup used in biscuit manufacturing. The Orders-in-Original confirmed the demands, leading to an appeal before the Commissioner (Appeals), who remanded the case for allowing Cenvat Credit on inputs and recalculating the demand, interest, and penalty.

The appellant argued that the issue was settled based on previous Tribunal orders, specifically referring to Final Order Nos. 70409-70417/2016 dated 30.06.2016, which favored the assessee in a similar case. The Revenue conceded that the present appeals fell under the purview of the Tribunal's previous decision. Upon considering the submissions and records, the Tribunal referenced a Co-ordinate Bench decision in the case of Rishi Bakers Pvt. Ltd., Kanpur, which held that there was no evidence to classify captively consumed sugar syrup under Tariff Item No. 17029090. Moreover, there was no proof that the goods were marketable in their existing form in the appellants' factory. Consequently, the Tribunal ruled that sugar syrup used in biscuit manufacturing, which was captively consumed, did not attract Central Excise duty due to the absence of evidence of marketability. As a result, the appeal was allowed, and the appellants were entitled to consequential benefits as per the law.

In conclusion, the judgment addressed the issue of classifying sugar syrup for Central Excise Duty in the context of biscuit manufacturing. The decision was based on the lack of evidence supporting the classification of captively consumed sugar syrup under the relevant tariff item and the non-marketability of the goods in question. The Tribunal's ruling favored the appellants, granting them relief from the Central Excise duty on sugar syrup used in biscuit production.