2014 (1) TMI 526 - AT - Central Excise

Exemption under Notification No.89/95 Products to be treated as useful by-products and not waste - Waiver of Pre-deposit Held that - The soap stock is further processed to get products needed in soap industry and then cleared - the argument that such products manufactured and sold can be considered as waste and exemption under Notification 89/95-CE dated 18-05-95 cannot be extended - the applicant is directed to make a deposit of Rupees Eight lakhs as pre-deposit upon such submission rest of the duty to be stayed till the disposal Partial stay granted.

Summary

Issues:
1. Whether products like acid oil and soap sludge are eligible for exemption under Notification No.89/95-CE dated 18-05-95 as waste products arising during the manufacture of exempted products.

Analysis:
The case involved a manufacturer of refined vegetable oils claiming exemption from excise duty for products like acid oil and soap sludge under Notification No.89/95-CE. The applicant argued that since refined oil was exempted, all other products were waste and eligible for exemption. However, the Revenue contended that these products were useful by-products and not waste, demanding duty for goods cleared during a specific period.

The Counsel for the applicant relied on previous decisions to support the argument that soap stock was a waste product. The Revenue, on the other hand, argued that the products, such as acid oils, were essential in the soap industry and not waste. They cited a Supreme Court case and a Tribunal decision to support their position.

After considering both arguments, the Tribunal found that the products in question were not prima facie considered waste as they were further processed for use in the soap industry. Therefore, the Tribunal directed the applicant to make a deposit and waived the pre-deposit of balance dues for admission of the appeal, with the collection stayed during the appeal's pendency.

In conclusion, the Tribunal held that the products like acid oil and soap sludge were not eligible for exemption under Notification No.89/95-CE as waste products. The applicant was directed to make a deposit, and the pre-deposit of balance dues was waived for the appeal's admission, with the collection stayed during the appeal process.