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TMI Blog2024 (2) TMI 614X X X X Extracts X X X X X X X X Extracts X X X X ..... rch contents does not qualify it as potato starch classifiable under Chapter Heading 1108. It has been held by the Tribunal in the cases cited supra that mere presence of certain elements of starch in the residue or scrap does not take it out of the purview of a waste or residue and the Department has to bring sufficient evidence to establish that the said product is not residue or waste. The impugned goods is not a manufactured product as per Section 3(1) of the Central Excise Act, 1944, which mandates that excisable goods must come into existence as a result of manufacturing process so as to attract the levy of excise duty; whereas in the present case, scrap-veg-refuse came into existence pursuant to process of recycling of waste water, undertaken only to reuse the reusable water content in the waste water - further, test report of Central Revenue Control Laboratory produced by the Revenue, is not conclusive as it only states that the sample tested positive for starch without going into the details of the composition of the sample and has not given any conclusive proof. The impugned orders are not sustainable in law and therefore, are set aside - Once, the demand itself i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Appellant No. 2 : M/s Max Builders Sl. No. Appeal No. Period O-I-A No. Date Amount 1 E/2792/2011 04/2007 to 11/2008 129-130/CE/Appl/Chd-II/2011 dt. 26.08.2011 Penalty of Rs.25,000/- u/r 26 3 E/75/2016 01/2014 to 06/2014 JAL-EXCUS-000-APP-218 to 219-15-16 dt. 29.10.2015 Penalty of Rs.50,000/- u/r 26 2. Briefly stated facts of the present case are that the Appellant No.1 is engaged in the manufacturing of Potato Chips, Kurkure and Namkeens etc. On gathering the intelligence that the Appellant No.1 is evading central excise duty in respect of potato starch classifiable under Tariff Item No. 11083100 of the Tariff by manufacturing and clearing the same clandestinely under the garb of scrap-veg-refuse without payment of appropriate duty and without reflecting the same in their monthly ER-1 returns, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ds needs to satisfy twin test of manufacture and marketability:- (a) Hindalco Industries Ltd vs UOI 2015 (315) ELT 10 (Bom.) affirmed by SC as 2019 (367) ELT A246 (SC) (b) Balrampur Chini Mills Ltd vs. UOI - 2014 (300) ELT 372 (All.) affirmed by SC as 2015 (322) ELT 769 (SC) (c) DSCL Sugar vs. UOI 2017 (355) ELT 61 (All.) (d) NK Proteins Ltd vs. CCE ST, Ahmedabad-III 2023-TIOL-338-CESTAT-AHM 3.6 The learned Counsel for the Appellants also submits that the vegetable refuse is in the form of wet paste/slurry and therefore, it is not capable of being marketed as starch. The vegetable refuse being in the form of wet paste/slurry is not a saleable commodity as it is prone to fermentation. Further, the condition in which it leaves the factory of the Appellant No.1 as a wet paste, makes it a non-marketable commodity and therefore, it fails the twin test of manufacture and marketability. In support of his contention, he places reliance on the following decisions:- (a) Hindustan Zinc Ltd vs Commissioner 2005 (181) ELT 170 (SC) (b) UOI vs Delhi Cloth General Mills Co. Ltd - 1997 (92) ELT 315 (SC) (c) Shri Varalakshmi Co. vs CCE, Salem 2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d therefore, the said report cannot be relied upon. He also submits that the impugned goods is entitled for exemption from payment of excise duty under the Notification No. 89/1995-CE dt. 18.05.1995 and Notification No. 27/2011-CE dt. 24.03.2011 because their final product was fully exempted during the relevant period. In support of this submission, he places reliance on the following case-laws: (a) CCE vs Priyanka Refineries Ltd 2010 (249 ELT 70 (Tri. Bang) (b) Ricela Health Foods Ltd vs CCE, Chandigarh 2018 (361) ELT 1049 (Tri. LB) affirmed by SC as 2022 (382) ELT 436 (SC) (c) CCE vs Indian Aluminum Co. Ltd 2006 (203) ELT 3 (SC) (d) Deepak Vegpro Pvt Ltd Vanaspati Division vs CCE, Patna 2022-TIOL-749-CESTAT-KOL 3.11 The learned Counsel for the Appellants also contested the invokation of extended period of limitation and the imposition of penalty. 4. On the other hand, the learned DR reiterated the findings of the impugned orders. 5. Heard both sides and perused the records. 6. After considering the submissions of both the parties, we find that the only issue involved in all these appeals is whether the impugned goods scrap-veg-refuse ..... X X X X Extracts X X X X X X X X Extracts X X X X
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