9911796707
TMI Blog2017 (4) TMI 799X X X X Extracts X X X X X X X X Extracts X X X X ..... ious solvents like acetone, ethyl acetate, methanol, toluene, tetrahydrofuron, dimethyl formamide, acetonitrile etc. and also procures the same indigenously without payment of duty. The solvents are used by the appellant for undertaking a chemical process and at the end of the process, the said solvents come out as an admixture of solvents in impure form. The admixture of the solvents is purified by the appellant and cleared in the market as mixture of solvents. During the period September 2006 to December 2012, the appellant cleared this mixture of solvent without payment of duty on the understanding that the said goods are not excisable as they are not manufactured. It is the case of the Revenue that the spent solvents or admixtured solvents appear to be liable to duty as per the definition of manufacture as provided in Section 2(f) of the Central Excise Act, 1944 and Note 1 to Chapter 29 of the Central Excise Tariff Act, 1985. Show cause notices were issued periodically which got adjudicated and demands were confirmed with interest and penalties were also imposed. 4. Learned counsel appearing on behalf of the appellant draws our attention to the show cause notice and the impugn ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ess undertaken by the appellant would amount to manufacture as the solvents which are used once come out in the form of mother liquor at different stages. These solvents are recovered by using recovery system/distillation process and the said solvents are used in the production process. The process undertaken is merely recovery of quality of the solvent which has got mixed during the course of manufacturing of bulk drug and what is cleared is only a spent solvent in the name of mixture of solvent which has undertaken certain purification process. It is his submission that the lower authorities called for the various documents like copies of the delivery challans, invoice, test report etc. and recorded statements of Manager Accounts on the issue. It is his submission that the said Manager Accounts in his statement dated 4.8.2007 has stated that they were paying central excise duty on such spent solvent/mixture of solvent upto September 2006 and subsequently after the decision of the Tribunal in the case of CCE, Hyderabad vs. Aurobindo Pharma Ltd. reported in 2006 (200) ELT 236, they stopped paying the central excise duty. He would submit that the products/mixture of solvents are sol ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in the factory premises and they get mixed up with various impurities and at a stage when they cannot be reused, they are cleared by the assessee for a consideration. In short, clearances of the mixed solvent, which is done from the factory premises, is the residue, which gets retained after the manufacturing of final products by repeated use of the solvents during the course of manufacturing of final products. The appellant's claim that these goods are not excisable is supported by the judgment of the Tribunal in the case of CCE, Hyderabad vs. Aurobindo Pharma Ltd. reported in 2010 (249) ELT 415 (wherein I authored the judgment). The relevant paragraphs in the said judgment of Aurobindo Pharma Ltd. need to be reproduced:- "3.2 The assessees are engaged in the manufacture of Bulk Drugs and Bulk Drugs Intermediates. They use solvents such as Methanol, Toluene etc., in the manufacture of the said products and availing Modvat Credit on the above said inputs/solvents. In the manufacturing process of the said finished goods, solvents such as Methanol, Toluene etc., are recovered and the same are re-used in the subsequent batches for four to five times till they become non-usable i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e alleging that the process that is carried out for the purification of the mixed solvents amounts to manufacture as per the provisions of Section 2(f) of the Central Excise Act, 1944. Since the said proposition is already decided by the Tribunal in the case of Aurobindo Pharma Ltd. and followed in the case of Lee Pharma Pvt. Ltd. (supra), the question of demanding any duty from the appellant on this invocation of the provisions of Section 2(f) does not arise. 10. Be that as it may, the apex court was considering the provisions of Section 2(d) of the Central Excise Act read with Section 2(f) of the Central Excise Act in the case of DSCL Sugar Ltd. (supra). The ratio of the said judgment would apply in the case in hand squarely. We respectfully reproduce the relevant paragraphs:- "5. However, show cause notices were issued to the respondents herein stating that Bagasse would be subject to duty under the Central Excise Act, 1944, as "other products". These show cause notices were issued to the respondents in terms of the provision contained in Rule 6(3) of the Cenvat Credit Rules, 2004 demanding various amounts. The said show cause notices were challenged by the respondents filing ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed accordingly and shall include not only a person who employs hired labour in the production or manufacture of excisable goods, but also any person who engages in their production of manufacture on his own account;" 9. The Revenue sought to cover the case under sub-clause (ii) as per which the process which is satisfied in relation to any goods in the Section or Chapter notices of the First Schedule to the Central Excise Tariff Act, 1985 would amount to 'manufacture'. Here again, fiction is created by including those goods as amounting to 'manufacture' in respect of which process is specified in the Section or Chapter notices of the First Schedule." It can be seen from the above reproduced ratio that the Revenue has sought to invoke the same provisions of Section 2(d) to fasten the liability on the appellant, even by applying the provisions of Section 2(d) of the Central Excise Act, 1944. In our view, the impugned orders are unsustainable as per the authoritative judicial pronouncements as reproduced herein above. 11. As we are holding that the entire issue is now squarely covered by the various judicial pronouncements, we are not recording any findings on the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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