2019 (12) TMI 112 - AT - Central Excise

Benefit of N/N. 67/95 - Captive consumption - molasses, denatured spirit, ethanol, etc. - denial of benefit on the ground that molasses has been consumed in the manufacture of non-excisable ethyl alcohol - HELD THAT - Tribunal has already passed series of order in respect of the same issue. Therefore, the issue is no longer res integra - This Bench in appellant s own case BANNARI SMMSN SUGAR LTD VERSUS C.C.,C.E. S. T-MYSORE 2018 (2) TMI 813 - CESTAT BANGALORE has observed that rectified spirit which is not used for human consumption is nothing but ethyl alcohol and is finding place in tariff item no. 22072000. Appeal allowed - decided in favor of appellant.

Summary

Issues:
1. Denial of exemption under Notification No.67/95-CE for molasses captively consumed.
2. Rejection of refund claim on the grounds of insufficient information regarding the consumption of molasses in excisable and non-excisable products.
3. Interpretation of the classification of ethyl alcohol and rectified spirit under the Central Excise Tariff.

Analysis:
1. The case involved the denial of exemption under Notification No.67/95-CE for molasses captively consumed by M/s. Bannari Amman Sugars Ltd. The Department issued show-cause notices seeking to deny the exemption and rejecting refund claims. The Orders-in-Original confirmed the show-cause notices, which were upheld by the Commissioner (A). The appellant argued that the Tribunal's precedent supported their claim for exemption under the notification, citing relevant cases like Manakpur Chinni Mills Ltd. The appellant emphasized that the duty was not refundable as the molasses were used for manufacturing excisable products like rectified spirit, which falls under CETH 2204.90.

2. The second issue pertained to the rejection of a refund claim due to insufficient information on the consumption of molasses in excisable and non-excisable products. The appellant contended that the authorities wrongly held that the duty was not refundable, emphasizing the classification of rectified spirit as excisable under CETH 2204.90. The appellant relied on the Tribunal's decision in the case of Kotari Sugars and Chemicals Ltd. to support their argument that the benefit of exemption cannot be denied based on the products being outside the central levy.

3. The final issue revolved around the interpretation of the classification of ethyl alcohol and rectified spirit under the Central Excise Tariff. The Tribunal referred to previous decisions and observed that ethyl alcohol and rectified spirit are essentially the same commodity. Citing the Hon'ble Supreme Court's observations, the Tribunal concluded that rectified spirit not used for human consumption is considered ethyl alcohol and falls under tariff item No. 2207 20 00. Consequently, the Tribunal set aside the impugned order and allowed the appeal with consequential relief, if any, as per law. The judgment was pronounced in Open Court on 27/11/2019.