1987 (10) TMI 304

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..... ellants also hold valid Central Excise licence for sugar under C.E.T. Item 1 as well as other excisable goods not elsewhere specified falling under C.E.T. Item 68. In the process of production of sugar molasses are obtained and is used in the production of alcohol and fusel oil in the same premises. The appellants had been availing of the exemption contained in Notification No. 118/75 dated 30-4-1975 under which goods falling under Tariff Item 68 manufactured in a factory and intended for use in the factory in which they were manufactured or in any other factory of the same manufacturer were exempted from the whole of duty of excise leviable thereon. The appellants continued to avail of this exemption till 1979-80 Budget by which the tariff .....

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..... y entitled to the exemption under Notification 118/75. 4. The lower appellate authority in the impugned order, however, has repelled all the pleas of the appellants before it in the following manner :- (a) Molasses cannot be treated as waste product because this is commercially different commodity and are used in the manufacture of other goods notably in the manufacture of alcohol. Therefore, its leviability to duty under Tariff Item 68 cannot be doubted. (b) The factory referred to in Notification No. 118/75 cannot be taken as a factory producing any item but it must be taken to mean as a factory producing an excisable item isasmuch as no concession concerning exemption from excise duty can be deemed to be relatable to an item which .....

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..... 1975. The emphasis is merely on the fact that goods falling under Tariff Item 68 should be used in a factory and there is no doubt that in the instant case the goods have been used in a factory as defined in Section 2(e) of the Central Excises and Salt Act, 1944. 7. We have heard learned JDR Mrs. J.K. Chander. She has reiterated the findings of the lower authorities. 8. We have carefully considered the pleas advanced on both sides. We observe that the following finding has been made, by the lower appellate authority :- It is evident that the sugar factory, the distillery, the fusel oil plant and the ice factory function under roof and operate under one industrial licence, though there are L-4 separately for sugar and for Item 68 comm .....

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