Clarification regarding re-refined used or waste-oil

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..... regarding excisability of re-refined used oil or waste oil. Various units are engaged in re-refining of waste oil or used lubricating oil collected from the transformers, service stations of vehicles etc. The matter has been examined. Process 2. Used Oil contains impurities and contaminants such as moisture, diluents, sediments, metal particles and carbon. In refining units, waste or used oil undergoes various process such as dehydration-for removal of moisture, distillation-for removal of diluents, clay polishing- for removal of carbon by adsorption process, filtration-for removal of the clay and the dissolved carbon to render it usable. The oil so obtained from such waste or used oil is packed and sold as base oil, lubricating oil .....

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..... them depending upon its composition. Lubricating oil on the other hand is classifiable under CETH 27101980 , a heading specifically covering lubricating oil. 3. It may be noted that used lubricating oil collected from service stations is not fit for use as primary products and will therefore be classified as waste oil whereas processed waste oil, which becomes fit for use as lubricating oil and would qualify as primary product, will be classified as lubricating oil. Manufacture 4. Waste oil after processing may become lubricating oil but this process would not amount to manufacture in view of the judgement of tribunal in case of Collector vs Mineral Oil Corporation [1999(114) ELT 166] upheld by Hon ble Supreme Court [ 2002(14 .....

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..... uld be leviable. Application 6. A unit processing waste oil or used oil would need be examined in above light to decide whether the process undertaken by them amounts to manufacture. Where the process amounts to manufacture, Central Excise duty is payable. The issue is interpretational in nature and therefore where a demand is raised pursuant to this circular, it should be raised for normal period of limitations only. SSI benefit, where admissible, should be extended. 7. Field formations and trade may be informed suitably. Difficulty experienced, if any, in implementing the circular should be brought to the notice of the Board. Hindi version would follow. (Santosh Kumar Mishra) Under Secretary to the Government of India .....

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