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2018 (10) TMI 751 - AT - Central ExciseWaste/By-products - benefit of N/N. 89/95-CE dated 18th February, 1995 - soap stock (gum), sludge, fatty acid oil, spent earth etc. arising during the course of manufacture of refined edible oils - Held that - Identical issue has come up for consideration before the Tribunal in the Appellants own case M/s Udyog Mandir vs CCE&ST, Jaipur-I 2018 (5) TMI 1711 - CESTAT NEW DELHI , where by following the judgment of the Larger Bench 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 , 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. Benefit of notification cannot be denied - appeal allowed - decided in favor of appellant.
Issues:
Interpretation of Notification No. 89/95-CE dated 18/02/1995 for exemption of waste products arising during the manufacture of refined edible oils. Analysis: The appeal was filed against the Order-in-Appeal passed by the Commissioner (Appeals) of Central Excise & CGST, Jaipur, for the period from April 2010 to December 2013. The dispute revolved around the duty liability on certain by-products arising during the manufacture of refined edible oils. The Appellants argued that they were entitled to the benefit of Notification No. 89/95-CE dated 18/02/1995, which exempts waste products manufactured in a factory producing a final product either chargeable to nil duty or fully exempted. The Department contended that excise duty should be paid on the clearance of dutiable by-products. The Tribunal referred to a previous case involving the same issue and followed the judgment of the Larger Bench in Ricela Health Foods Ltd. & Ors. vs. CCE, Chandigarh. The Tribunal held that the waste products in question were not excisable goods but waste arising during the refining process, thus qualifying for exemption under Notification 89/95-CE. The Tribunal noted that the Larger Bench had already decided that the items in dispute were not by-products of the manufacture of refined edible oil. It was clarified that the removal of unwanted materials like gums, waxes, and fatty acids did not constitute a manufacturing process for these items, as the main process was for refined rice bran oil. The waste products were considered incidental and covered by the exemption notification. Citing the judgment in Ricela Health Foods Ltd., the Tribunal extended the benefit of Notification 89/95-CE to waste products such as fatty acid oil, sludge, soap stock (gums), and spent earth generated during the production of refined edible oils. Consequently, the impugned order was set aside, and the appeal was allowed, following the Tribunal's earlier decisions and the Larger Bench's ruling. In conclusion, the Tribunal allowed the appeal filed by the Appellants, as the issue regarding the exemption of waste products arising during the manufacture of refined edible oils had been settled in previous judgments. The decision was based on the interpretation of Notification No. 89/95-CE dated 18/02/1995 and the application of relevant legal principles established in earlier cases.
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