9911796707
|
Home
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2022 (11) TMI 1276 - AT - Central ExciseProcess amounting to manufacture - conversion of waste oil/ sludge into reclaimed fuel oil/re-refining used oil - HELD THAT - In the present case, the demand is for the subsequent period whereas on the same issue for the earlier period the case has been decided in favour of the appellant by this Tribunal in ALICID ORGANIC INDUSTRIES LIMITED AND SHRI MANISH C PATEL VERSUS C.C.E. S.T. -AHMEDABAD-III 2022 (8) TMI 163 - CESTAT AHMEDABAD wherein it was held that the process of cleaning of waste oil to yield reclaimed fuel oil does not amount to manufacture as defined under Section 2(f) of the Central Excise Act, 1944. It is clear that except for the different period, the issue is identical which has been settled in the above order - Appeal allowed - decided in favor of appellant.
Issues involved:
Whether the conversion of waste oil/sludge into reclaimed fuel oil/re-refining used oil amounts to manufacture under Section 2(f) of Central Excise Act, 1944, classifiable under Central Excise Tariff Act, 1985, and attracting Central Excise duty or not. Detailed Analysis: Issue 1: Conversion of waste oil/sludge into reclaimed fuel oil/re-refining used oil The Tribunal considered whether the conversion of waste oil into reclaimed fuel oil amounts to manufacture under the Central Excise Act. The appellant argued that the process undertaken did not amount to manufacture as the product remained oil throughout the process. The Tribunal referred to previous decisions and highlighted that not every change constitutes manufacture. It emphasized that for a process to be considered manufacturing, the commodity must become a new and distinct product recognized in trade. The Tribunal noted that in this case, the waste oil was purified through processes like filtering and distillation, but the end product remained oil, indicating no new commodity emerged. It also referenced similar cases where reclamation of oils did not attract excise duty. Issue 2: Applicability of Chapter Note 4 of Central Excise Tariff Act The Tribunal analyzed the applicability of Chapter Note 4 of Chapter 27 of the Central Excise Tariff Act. It noted that the process undertaken by the appellant did not involve relabelling, repacking, or rendering the product marketable to consumers, as required by the chapter note. The Tribunal highlighted that the appellant only purified waste oil and did not engage in activities covered by the note. It also referenced a circular clarifying that the chapter note applied specifically to lubricating oils and preparations, not reclaimed fuel oil like in the present case. The Tribunal concluded that the process of cleaning waste oil to produce reclaimed fuel oil did not constitute manufacture under Section 2(f) of the Central Excise Act. Issue 3: Limitation on demand for Central Excise duty The Tribunal addressed the issue of limitation on the demand for Central Excise duty. It examined the timeline of communication between the appellant and the Central Excise authority regarding the activity involving waste oil. The Tribunal observed that the department was aware of the appellant's operations and had not issued a show cause notice demanding duty during a specific period. It noted that the demand raised beyond the normal limitation period was not sustainable, as per a circular instructing demands to be raised within the normal period for interpretational issues. The Tribunal concluded that the demand for duty was not sustainable on merit or limitation grounds. In conclusion, the Tribunal set aside the impugned order, allowing the appeal based on the findings that the process of converting waste oil into reclaimed fuel oil did not amount to manufacture and that the demand for duty was not sustainable on both merit and limitation aspects.
|
