2019 (11) TMI 241 - AT - Central Excise

SSI Exemption - byproducts namely fatty acid, soap stock, spent earth emerged - demand of duty along with interest and for imposing penalties - HELD THAT - The 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 Noting that the reference is to decide whether these are to be treated as waste for the purpose of exemption N/N. 89/95-CE we note though the excisability of the product itself is seriously in dispute as per the opinion expressed by us, these cannot be considered as anything other than waste and as such will be covered by the exemption N/N. 89/95-CE. Appeal allowed - decided in favor of appellant.

Summary

Issues:
- Eligibility for SSI exemption benefit on manufacturing of certain products
- Liability of excise duty on byproducts

Analysis:
The judgment by the Appellate Tribunal CESTAT Chennai involved the issue of eligibility for SSI exemption benefit in the context of manufacturing refined oils and related products. The appellants were engaged in the manufacture of various oils and byproducts such as fatty acid, soap stock, and spent earth. The Department contended that these byproducts were liable to excise duty, thereby disqualifying the appellants from the SSI exemption benefit. A Show Cause Notice was issued, leading to the confirmation of duty demand, interest, and penalties by the adjudicating authority. The appellants, aggrieved by this decision, approached the Tribunal for redressal.

During the proceedings, the appellant's counsel referenced a decision by the Larger Bench of the Tribunal in a similar case, where demands had been set aside. The respondent, represented by the ld. AR Ms. T. Usha Devi, argued that the Larger Bench decision was not applicable to the present case. After hearing both sides and examining the submissions along with the records, the Tribunal concluded that the issue at hand was indeed covered by the Larger Bench's decision. In alignment with the precedent set by the aforementioned decision, the Tribunal held that the demands could not be sustained. Consequently, the impugned orders were set aside, and the appeals were allowed with any consequential relief deemed appropriate.

In summary, the judgment clarified the eligibility for SSI exemption benefit concerning the manufacturing of specific products and addressed the liability of excise duty on the generated byproducts. By relying on the precedent established by the Larger Bench decision, the Tribunal ruled in favor of the appellants, setting aside the demands and providing relief in line with the established legal principles.