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TMI Blog2017 (10) TMI 644X X X X Extracts X X X X X X X X Extracts X X X X ..... entral Excise Tariff is not proper in the context of the present case. It is clear that in Central Excise levy, there are certain restrictions placed by the Constitution with reference to the powers of Union Govt. to tax on alcohol for human consumption. With this background, the Central Excise Tariff is structured and it is not equivalent or comparable to the HSN to that extent - as such there is no dispute about the nature of product cleared by the appellant. The reliance by original authority on the comparison with HSN is misplaced. The finding that the entry 2207.20 does not cover undenatured ethyl alcohol having strength at 80% and above and hence the same is non-excisable, is not legally and factually sustainable. Ethyl alcohol/ rectified spirit which is not for human consumption is finding place in tariff item 2207 2000. The impugned order holding ethyl alcohol as non excisable product is not legally sustainable - appeal allowed - decided in favor of appellant. - Excise Appeal No. E/2731-2735/2012-[DB] - Final Order No. 50706-50710/2017 - Dated:- 9-2-2017 - Mr. S.K. Mohanty, Member (Judicial) And Mr. B. Ravichandran, Member (Technical) For The Appellant : Mr. Amit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is not an excisable item as the same is not mentioned in Central Excise Tariff during the relevant time. The Ld. Counsel submitted that the relevant tariff entry under heading 2207 2000 mentions Ethyl alcohol and other spirits, denatured, of any strength . This entry should be read with the exemption Notification No. 3/2005 (serial No. 14) which mentions all spirits (other than denatured ethyl alcohol of any strength) . It is clear that the exemption which is specific to the tariff heading includes ethyl alcohol, and as such, they have correctly availed the exemption and followed the procedure in terms of Rule 6(3) of Cenvat Credit Rules, 2004. 3. The Ld. Counsel further relied on Board s Circular dated 25.02.2005 to state that the said Notification was issued to continue the existing rate of duty after switch over to the new 8 digit tariff. Ethyl alcohol, irrespective of the fact that whether the same is denatured or not, continues to be covered under Tariff heading 22072000. The Ld. Counsel placed reliance on the following decisions in support of his submissions. a) Ugar Sugar Works Ltd. vs. CCE 2007 (214) ELT 337 (Tri. Bang.) b) Ugar Sugar Works Ltd. vs. CCE 2008 (23 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he introduction of 8 digit classification with effect from 1.3.2005, Heading 2207 covers ethyl alcohol and other spirits, denature, of any strength. On perusal of the impugned order, we find that the appellant contended before the Adjudicating authority that Rectified Spirit with 95% strength was removed from the factory. It cannot be alcoholic liquor for human consumption. Both Rectified Spirit and Denatured Ethyl alcohol are only varieties of Ethyl alcohol and liquor for human consumption. As per Dictionary meaning, Rectified Spirit is distilled Ethanol with only 4.43% water and it is nothing but Ethyl alcohol with highly concentrate Ethanol and cannot be fit for human consumption. Normally, Ethyl alcohol are ranging from 10% to 40% in liquor. In any event, Rectified Spirit (95) is more akin to denatured Ethyl alcohol and both are industrial alcohol falling under Heading No. 2207 of HSN. In this perspective, if we look into Notification No. 3/2005-CE (supra), as claimed by the appellants, the words all spirits in Serial No. 14 of the Table of the said Notification have wide amplitude and it includes irrespective of whether denatured or not. So, we are of the view that Rectified S ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... CCE, Visakhapatnam - 2007 (207) E.L.T. 400 (Tri.-Bang.) and the Final Order Nos. 56 to 59/2007 dated 30-11-2006 [2007 (212) E.L.T. 234 (Tribunal)] in the case of The Godavari Sugar Mills Ltd. Others v. CCE. It is on record that the appellants had reversed total Cenvat credit of ₹ 1,22,49,550/- attributable to the molasses used in or in relation to the manufacture of 3073155 ltrs. of Rectified Spirit cleared without payment of duty. 8.7 In the case of CCE Vs. M/s Bazpur Cooperative Sugar Factory Ltd. 2014-TIOL-1733-HC-UKHAD, the Honble Uttarkhad High Court held that Rectified spirit attracting nil rate of duty and waste/storage loss of Rectified Spirit, credit availed on duty paid on molasses is required to be reversed under Rule 6(1) of the CENVAT Credit Rules, 2004. In that case, while scrutinizing the return of the assessee for the month from July 2005 to March 2006, it was observed that the stock was short by 33172.80 bulk litres. It was shown as wastage. The Hob ble High Court in favour of the Revenue held that CENVAT credit attributable to the quantity of inputs (molasses) used in or in relation to the manufacture of the exempted final products (Rectified spiri ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing 6% of the invoice value on the clearance of the Rectified spirit. Thus, the appellants are eligible to avail the benefit of Notification No. 67/95-CE dated 16.3.1995 in respect of molasses used in the manufacture of Rectified spirit and ENA. 7. The Tribunal held that after restructuring of Central Excise Tariff from 6 digit to 8 digit w.e.f. 01.03.2005, rectified spirit and extra neutral alcohol are exempted by Notification 3/2005-CE and the appellants had correctly discharged their obligation under Rule 6 of Cenvat Credit Rules, 2004. 8. We find similar decisions were recorded by the Tribunal in many other cases. Reference can be made by Bajaj Hindustan Sugar Ltd. 2016-TIOL-2063 (CESTAT)-All, Ugar Sugar Works Ltd. 2008 (232) ELT 81 (Tri. Bang), Ugar Sugar Works Ltd. 2007 (214) ELT 337 (Tri. Bang.). 9. We also note that the Hon ble Supreme Court in Modi Distillery (1995)5SCC 753 held that Ethyl alcohol was not an alcoholic liquor for human consumption but could be used as a raw material or input after processing and substantial dilution in the production of whiskey, country liquor etc. It was held that the State is not empowered to levy excise duty on such item. 1 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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