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TMI Blog2024 (6) TMI 1038X X X X Extracts X X X X X X X X Extracts X X X X ..... a distinctive name, character or use. In the case of CEE JEE Lubricants Vs. Commissioner of Central Excise Customs, Cochin [ 2019 (8) TMI 1173 - CESTAT BANGALORE ] wherein it is held that We have considered the submissions made at length by both sides and peruse the records, it is undisputed that the appellant procured used oil from different sources. The processing under taken by the appellant is in form of Vacuum distillation, Centrifuging removal of moisture, carbon and other impurities. The entire tenor of the adjudicating authority while confirming the demand is only on the ground that the used oil was unfit for use as lubricating oils were made fit for the use by the appellant by refining or re-processing the same and hence, characteristic and the use has changed. Due to which Chapter Note 4 of Chapter 27 gets attracted and the said activity becomes manufacture. The various decisions and the CBEC Board Circular, it is clear that Note 9 of Chapter 27 is not applicable to the present case. Therefore, the question of whether reprocessing of used waste oils into reprocessed oils that have marketable would amount to manufacture is answered in the negative concluding that it does ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o.1 2/2011-CX (COMMR.) dated 31.10.2011 is the de novo order based on the directions of the CESTAT, Bangalore vide Final Order No. 1296/09 dated 28.10.2009. The other one is the Order-in-Appeal No.TVM-EXCUS-000-APP-037-15-16 dated 14.05.2015. Both these orders deal with the issue whether the activity undertaken by the appellant to convert the waste oils which is neither fit for use nor marketable as the primary product into lubricating oils which is not only fit for use and easily marketable as a primary product under Chapter 27101 980 of Central Excise Tariff Act (CETA), 1985 would amount to manufacture. The Order-in-Appeal No. TVM-EXCUS-000-APP-65-15-16 dated 29.05.2015 deals with the issue on extending the benefit of SSI notification to the appellant during the relevant period. 3. The Commissioner observing that the waste oil after reprocessing is fit for use as a primary product and is marketable, hence, concludes that it amounts to manufacture by virtue of the provisions contained in Note 9 of Chapter 27 which reads as: In relation to lubricating oils and lubricating preparations of heading 2710 labelling relabelling of containers or repacking from bulk packs to retail packs o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... these directions, the original authority vide Denovo Order No.4/CE/2010 held that the appellants are liable to pay Central Excise duty on the entire quantity of reprocessed lubricating oils manufactured and cleared from their factory from 01.03.2000 onwards which was upheld by the Commissioner (Appeals) against which Appeal No. E/21890/2015 is filed. The learned counsel submits that Appeal number E/327/2012 and E/328/2012 are filed against Order in Original 1 2/2011 CX COMMR dated 31.10.2011. Appeal number E/21902/2015 is filed against Order-in-Appeal No. TVM-EXCUS-000-APP-65-15-16 dated 29.05.2015 where the Commissioner (A) had denied the SSI exemption and demanded Central Excise duty of Rs.21,63,000/- for the period 1.4.2011 to 22.08.2011 on the ground that the aggregate clearances of the excisable goods had exceeded ₹4,00,00,000 during the period from 2010-2011. 4.2 The learned counsel submitted that waste oils are collected from various sources and is pumped into the used royal storage tanks and later, pumped into the processing unit. The processing plant consists of 4 distillation columns and each distillation column consists of reboilers/heaters, coolers and condensers ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that the process of removing impurities and contaminants in the waste oils and their segregation to base oils/ reprocessed oils of different viscosities does not amount to manufacture in terms of Section 2(f) of the Central Excise Act 1944 read with Chapter Note 9/4 under Chapter 27 as the chapter Note 9/4 is in relation to lubricating oils and lubricating preparations of Chapter Heading 2710 where labelling/ relabelling of containers and/or repacking from bulk pack to retail packs or the adoption of any other treatment to render the product marketable to the consumers shall amount to manufacture. 4.5 He relies on the decision of the Hon ble Supreme Court in the case of Servo-Med Industries Private Limited versus CCE Mumbai 2015 (319) ELT 578 (S.C.) held that if there is no transformation to a different commodity there is no manufacture. 4.6 Further, reliance is also placed on the following decisions: MMTC versus Union of India: 1983 (13) ELT 1542 S.C. Mineral Oil Corporation versus CCE Kanpur: 1999 (114) ELT 166 (Tribunal) CEE JEE Lubricants Vs. Commissioner of Central Excise and Customs, Cochin: 2010 (251) ELT 439 (Tri-Bang.) 4.7 He also relied on the CBEC Circular No.1024/12/201 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e distinct and identifiable product different from the input material which is marketable; hence, as held by the authorities, the product is marketable and leviable to excise duty. He also submits that since there was a stay from the High Court, the show-cause notice dated 04.06.2010 for the period from 2000 to 2010 is legally sustainable. He also submits that the judgement by this Tribunal in the case of M/s. Cee Jee Lubricants Vs. Commissioner of Central Tax Central Excise, Cochin issued vide Final Order No. 20671-20672/2019 has been appealed against and hence, has not attained finality. 6. Heard both sides at length and perused the records. The undisputed facts are that the appellant is collecting used oil from various sources and subjecting them to various processes to make them fit for use and they are clearing them as reprocessed base oil/lubricants. The question before us is whether these processes amount to manufacture in terms of Section 2(f) read with Chapter Note 9/4 to Chapter 27 of Central Excise Tariff Act, 1985. Waste oils is defined under Chapter Heading 2710 which means waste containing mainly petroleum oils and such oils no longer fit for use as a primary product ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mmissioners of Customs, Central Excise Service Tax; All Director Generals of Customs, Central Excise Service Tax; All Principal Commissioners/ Commissioners of Customs, Central Excise Service Tax; Subject:- Clarification regarding re-refined used or waste-oil reg Madam/Sir, References have been received 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 and transformer oil etc. to the consumers for further use. Classification 2.1 Waste oil has been defined in note 3 of chapter 27 of First Schedule of Ce ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g or re-labelling of containers and re-packing from bulk pack to retail packs or the adoption of any other treatment to render the product marketable to the consumers, shall amount to manufacture 5.2 This chapter note applies only to lubricating oils and lubricating preparations of heading 2710 . Other goods falling under CETH 2710 are not covered by the chapter note. The deeming fiction provides that when one of the process listed in the chapter note is carried out on lubricating oil or lubricating preparations, it shall be deemed to be manufacture. These processes are- (i) labelling or re-labelling of containers, (ii) re-packing from bulk pack to retail packs, (iii) adoption of any other treatment to render the product marketable to the consumers. 5.3 Thus for a re-refining unit, the test for levy of Central Excise duty is whether the lubricating oil (produced from the waste oil) has undergone any of the process listed in chapter note 4 of chapter 27 as explained above (paragraph 5.2). Where such process has been carried out, it would amount to manufacture and Central Excise duty would be leviable. Application 6. A unit processing waste oil or used oil would need be examined in a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e find that an identical issue was before the co-ordinate bench of the Tribunal in the case of CCE, Chennai-I Vs. Metropolitan Transport Company. We find that the ratio in the said decision squarely applicable in this case also . 8. In view of the above discussions, the various decisions and the CBEC Board Circular, it is clear that Note 9 of Chapter 27 is not applicable to the present case. Therefore, the question of whether reprocessing of used waste oils into reprocessed oils that have marketable would amount to manufacture is answered in the negative concluding that it does not amounts to manufacture. Accordingly, the appeal No. E/327/2012 E/328/2012 and E/21890/2015 are allowed in favour of the appellant. However, it is also claimed by the appellant that wherever they cleared these processed oils as lubricating oil duty is being discharged on the reprocess base oil heavy, one of the resultant products which was blended with additives and chemicals, packed in barrels and other small packs and sold as lubricants. Though, this fact has been noted at para 8.3 of the Order-in-Original No. 04/CE/2010 dated 27.01.2010 as submissions made by the appellant, there is nothing on record t ..... 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