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2024 (3) TMI 849 - AT - Central ExciseExemption from duty - Fatty Acid, Wax and Gum falling under Ch.15220090 of the First Schedule to Central Excise Tariff Act, 1985 (Tariff Act) arsing in course of manufacture of refined vegetable oil, are to be treated as waste or not - eligibility for exemption under N/N. 89/1995-C.C. dated 18.05.1995 - Extended period of Limitation - HELD THAT - The issue is covered by the decision in 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 Larger Bench held that Noting that the reference is to decide whether these are to be treated as waste for the purpose of exemption Notification No. 89/95-C.E. we note though the excisability of the product itself is seriously in dispute as per the opinion expressed by us, as above, these cannot be considered as anything other than waste and as such will be covered by the exemption Notification No. 89/95-C.E. Considering the aforesaid observations made by the Larger Bench, there are no reason to differ from the same and the impugned order confirming the demand in respect of the Fatty Acids treating them as bye-product set aside. Extended period of limitation - HELD THAT - Since the issue on merits is answered in favour of the appellant/assessee, the issue of extended period of limitation is not required to be gone into. Appeal allowed.
Issues:
The judgment involves the issue of whether Fatty Acid, Wax, and Gum arising during the manufacture of refined vegetable oil are to be considered as "waste" and eligible for exemption under Notification No.89/1995-C.C. dated 18.05.1995. Comprehensive Details: The Appellate Tribunal CESTAT NEW DELHI, in the case of M/s Sheel Chand Agro Oils Pvt. Ltd, addressed the challenge against the Order-in-Appeal confirming the demand of excise duty on the appellant. The appellant, a manufacturer of Refined Vegetable Oils/Vanaspati, cleared waste materials like gum, wax, and fatty acid availing Central Excise duty exemption under Notification No.89/1995. The Department raised the issue of admissibility of duty exemption on fatty acid, leading to a Show Cause Notice for the demand and recovery of Excise Duty. The Adjudicating Authority confirmed the demand, considering fatty acid as a bye-product and not waste, based on a Tribunal decision. The appellant contested this in appeal, citing a different Tribunal decision, but the Appellate Authority upheld the Adjudicating Authority's findings, denying the exemption under Notification No.89/1995. The central issue revolved around whether the waste materials like Fatty Acid, Wax, and Gum, arising during the manufacturing process of refined vegetable oil, should be classified as "waste" and thus eligible for exemption under Notification No.89/1995-C.C. The Tribunal considered the arguments presented by both parties and referred to the decision in M/s. Ricela Health Foods Ltd. Vs. CCE, Chandigarh, which emphasized that the value a product may fetch should not be the sole determinant of whether it is waste or a by-product. The Tribunal concluded that the products in question, such as gums, waxes, and fatty acid, were waste arising during the refining process and not manufactured excisable goods. Therefore, these materials were deemed eligible for exemption under Notification No.89/1995-C.E. In light of the above analysis and following the precedent set by the Larger Bench decision, the Tribunal set aside the impugned order confirming the demand on Fatty Acids, considering them as bye-products and not waste. As the issue was resolved in favor of the appellant, the Tribunal did not delve into the extended period of limitation. Consequently, the appeal was allowed, and the order was pronounced on 19th March 2024.
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