2023 (8) TMI 1137 - AT - Central Excise

Levy of Excise Duty - spent earth arising in the process of oil refining, bleaching process, classifiable under 15220090 of the Central Excise Tariff Act 1985 - HELD THAT - The issue is that whether the spent earth is liable to Excise duty or otherwise has now been settled in various judgments cited by the Learned Counsel. The judgment in case ofADANI WILMAR LTD VERSUS C.C.E. S.T. -AHMEDABAD-III 2023 (3) TMI 535 - CESTAT AHMEDABAD held that these products are not intentionally manufactured but only arise during the process of refining of crude vegetable oil and therefore should be considered as waste and they are entitled to the benefit of exemption N/N. 89/1995-CE. The issue is no longer res-Integra as has been held that the spent earth arising out of processing of oil is not liable to duty in terms of Notification No. 89/95-C.E. dated 18-05-2019 - demand not sustainable - appeal allowed.

Summary

Issues involved:
The issue involved in the present case is whether the spent earth arising in the process of oil refining, bleaching process is classifiable under 15220090 of the Central Excise Tariff Act 1985 and consequently liable for Central Excise Duty.

Comprehensive Details of the Judgment:

Issue 1: Classification under Central Excise Tariff Act 1985 and liability for Central Excise Duty

The Learned Counsel for the Appellant cited various judgments to support the contention that the issue of spent earth liability for Excise duty has been settled. The Tribunal referred to the case of Adani Wilmar Ltd and a similar case before CESTAT New Delhi, where it was held that the spent earth arising from the oil refining process is considered waste and entitled to exemption under Notification 89/95-CE. The Tribunal emphasized that the products in question are waste arising during the refining process and not intended for manufacturing, thus qualifying for exemption. The Tribunal rejected the Revenue's argument that products capable of being sold cannot be considered waste, stating that the value realized does not determine the excisability of the product. The Tribunal concluded that the spent earth is not excisable goods and falls under the exemption notification, allowing the appeal and setting aside the impugned order.

Final Decision:

Based on the precedent set by previous judgments and the interpretation of the refining process, the Tribunal ruled that the spent earth arising from oil processing is not liable for Central Excise Duty and qualifies for exemption under Notification 89/95-CE. Consequently, the impugned order was set aside, and the appeals were allowed.

*(Pronounced in the open court on 25.08.2023)*