9911796707
Advanced Search 
TMI Blog2019 (11) TMI 558X X X X Extracts X X X X X X X X Extracts X X X X ..... , that seeks to demand an amount of Rs. 6,65,308/- from the petitioner towards Central Excise duty, Education Cess and Secondary Higher Education Cess for the period from July, 2009 to January, 2014, in respect of the carbon dioxide that was produced in its factory and captively consumed in the course of manufacture of beer. The basic premise in the show cause notice is that, during the process of fermentation that is integral to the manufacture of alcoholic liquor, carbon dioxide, which is an excisable commodity, is generated as a by-product and the petitioner admittedly uses the said carbon dioxide in the further manufacturing process to produce alcoholic liquor for human consumption (beer). A reference is made to Notification No. 67/95-C ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the manufacturing process is an independent product mentioned in the Schedule to the Central Excise Tariff Act, and hence, the petitioner cannot escape liability to pay duty on the said product at the stage of captive consumption of the same. A reference is made to Rule 4 of the Central Excise Rules, which clearly stipulates that captive consumption is also deemed to be a removal for the purposes of levy of Central Excise duty. Referring to the provisions of Notification No. 67/95-C.E., dated 16-3-1995, the respondents would contend that, inasmuch as the petitioner is admittedly not paying any Central Excise duty on the beer manufactured by it, they cannot claim the benefit of exemption from payment of duty on the carbon dioxide captively c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ad with Entry 84 of List I of the VIIth Schedule to the Constitution. Entry 84 of List I as is stood during the relevant time read as follows : "84. Duties of excise on tobacco and other goods manufactured or produced in India except (a) alcoholic liquors for human consumption and (b) opium, Indian hemp and other narcotic drugs and narcotics." Under the Central Excise Act, the levy and collection of duty is envisaged under Section 3, which is the charging Section. As per the said Section, the levy and collection of Central Excise duty is to be on all excisable goods produced or manufactured in India and at the rates set forth in the Schedule to the Act. Excisable goods are in turn defined under the Act to mean those goods that are s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ral Excise Act, the requirement of payment of Central Excise duty on each dutiable product manufactured in the factory of the manufacturer led to an increase in the cost of manufacture of the final product (since the duty paid on the intermediate product had to be absorbed by the manufacturer into the cost of manufacture of the final product), with the introduction of the MODVAT/CENVAT Scheme that was designed to avoid the cascading effect of taxes on the various products that went into the manufacture of a final product, it became possible for a manufacturer to set off any duty paid on a captivelly consumed product in his factory, against the duty paid on the final product that was cleared from his factory. With a view to spare the manufac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... olic liquor for human consumption. While carbon dioxide may be an independent product mentioned under the Central Excise Tariff, in the instant case, it is a product that arises in a manufacturing process that does not attract the levy of Central Excise duty under the Central Excise Act. The further use of the carbon dioxide by the manufacturer can only be seen as an efficient process for the manufacture of beer, where the manufacturer puts to use the carbon dioxide generated, which otherwise would have to be let out from the factory as a waste gas. In my view, the levy of Central Excise duty is not attracted in such cases, where a by-product emerges in the course of manufacture of non-excisable products and the captive consumption of the s ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
