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TMI Blog2024 (7) TMI 1310X X X X Extracts X X X X X X X X Extracts X X X X ..... CENTRAL EXCISE AND SERVICE TAX VERSUS M/S. DHARANI SUGARS AND CHEMICALS LTD. [ 2022 (3) TMI 274 - SC ORDER ] where it was held ' We do not find any merit in the present appeal, as the respondent/assessee has enjoyed the benefit of the exemption Notification No. 67/95-C.E., dated 16-3-1995 till financial year 2005-06. The appellant-Revenue has predicated their case on the addition of the item other in Heading No. 22.04 made vide sub-heading 2204.90 with effect from 1-3-2005. In our opinion the aforesaid addition is not a substantive change or modification.' The Tribunal in the case of M/S. DHARANI SUGARS CHEMICALS LTD. VERSUS THE COMMISSIONER OF CGST CENTRAL EXCISE, TIRUNELVELI. [ 2024 (7) TMI 1163 - CESTAT CHENNAI] has considered the issue in detail. The view of the department as to whether rectified spirit and undenatured alcohol are not non-excisable has been considered by the Tribunal in detail, where it was held that 'The Board Circular No. 808/5/2005-CX dated 25.02.2005 was also relied. It has been clarified by Board that rectified spirit and extra neutral alcohol are covered under subheading 22 07 2000 after restructuring of the Tariff. Thus, it will be covered un ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s (rectified spirit etc.). The Show Cause Notice proposed to disallow the credit, recover the same along with interest and also for imposing penalties. The notice also proposed to demand duty on molasses manufactured and captively consumed. After due process of law, the adjudicating authority disallowed the credit on molasses, confirmed the duty on molasses along with interest and imposed penalties. Aggrieved by the said order, the appellant is now before the Tribunal. 2. The learned counsel Shri M.N. Bharathi appeared and argued on behalf of the appellant. He submitted that the issue as to whether rectified spirit and undenatured alcohol are excisable goods has been settled by the decision of the Hon'ble Supreme Court in the case of CCE Vs. Dharani Sugars Chemicals Ltd. reported in 2022 (379) ELT 556 (SC). The Tribunal in the case of Dharani Sugars Chemicals Ltd. Vs. CGST Central Excise vide Final Order No. 40560 of 2024 dated 27.5.2024 had considered the very same and after following the above judgment of the Hon'ble Supreme Court, set aside the demand raised by the department. So also in the case of EID Parry India Ltd. Vs. CGST Central Excise vide Final Order No. 40464/ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nder:- 12. The issue to be decided is whether appellant is eligible for the benefit of Notification No.67/95-CE dated 16.03.1995 and also whether the credit availed on inputs/input services / capital goods are eligible. 13. The very same issues were considered in the appellant s own case. The findings of the Tribunal in Final Order No.40789-40799/2014 dated 20.11.2014 reads as under:- 8.1 For the proper appreciation of the case, we take up the facts from Appeal No. E/41188/2014 in the case of M/s. Rajshree Sugars and Chemicals Ltd. Vs. CCE, Puducherry. The adjudicating authority observed that Denatured Ethyl Alcohol were dutiable and removed from the factory on payment of appropriate excise duty and the non-excisable goods i.e. varieties of Denatured Ethyl Alcohol including Rectified spirit were removed on payment of an amount equivalent to 6%, on the invoice value in terms of Rule 6 of the CENVAT Credit Rules, 2004. Ethyl Alcohol mainly has an intoxicating agent in alcohol-based liquor for human consumption. Prior to 1.3.2005 of Tariff restructuring from 6 digit to 8 digit Heading No. 2204.90 of the CETA covers Rectified Spirit and ENA, NIL rate of duty. The appellants were eligib ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 19 2207 10 90 2207 20 00 Ethyl Alcohol and other spirits, denatured of any strength --- --- --- --- - Ethyl Alcohol and other spirits, denatured of any strength 12% (IV) Notification No. 3/2005-CE dated 24.2.2005 (Serial No. 14 of the Table) all spirits (other than denatured ethyl alcohol of any strength) under sub-heading No. 2207 20 00 extended nil rate of duty. (V) Notification No. 3/2005-CE dated 24.2.2005 was superseded by Notification No. 12/2012-CE dated 17.3.2012. Sl. No. 40 of the Table appended to Notification No. 12/2012 all spirits (other than denatured ethyl alcohol of any strength) under sub-heading 2207 20 00, extended nil rate of duty. (VI) In the present case, the Issue Involved is eligibility of Notification No. 67/95-CE (supra), which is as under:- In exercise of the powers conferred by sub-section (1) of section 5A of the Central Excise Act, 1944 (1 of 1994) read with sub-section (3) of section3 of the Additional Duties of Excise (Goods of Special Importance) Act, 1957 (58 of 1957), (hereinafter referred to as the said Special Importance Act), the Central Government, being satisfied that it is necessary in the public interest so to do, hereby exempts - (i) capi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t classification code in It's new 1 2nd Schedules) from 28.02.2005. Trade should also be sultably informed Immediately and guided in the matter so that the transition from 6-digit to 8-digit classification code is smooth without any difficulty to the trade in day-to-day clearances. 3. Notification No. 3/2005-CE dated 24th February 2005 has been Issued to preserve the existing duty rates on specified commodities where effective rates were built into the six-digit tariff, but are now subject to different tariff rates in the 8-digit code. This is subject to any subsequent changes. 8.4 In the present case, there is no dispute that prior to 28.2.2005, Rectified Spirit and ENA manufactured by the appellant were covered under sub-heading No. 2204.90, NIL rate of duty. After amendment of Tariff (8 Digit Classification Code), Heading 22.04 would correspond to Heading No. 22.07. In the above Board Circular, it has been clarified that Notification No. 3/2005-CE dated 24.2.2005 was issued to preserve the existing duty rate. So, it is clearly evident that the Rectified Spirit existing NIL rate of duty under Sub-heading No. 2204.90 has been covered under Serial No. 14 of the Table appended t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pted in the numbering scheme for Central Excise classification through the Central Excise Tariff (Amendment) Act, 2004 (5 of 2005). These amendments do not Involve any substantive changes in the existing rules, so the particulars of each rule have not been indicated. Furthermore, during debate in Lok Sabha on the said Central Excise Tariff (Amendment) Bill, 2004, the then Hon'ble Minister of Finance in regard to the purpose of Introduction of eight-digit classification has stated that the purpose of the Bill is very limited. On the custom side, we already have an eight-digit classification. It is, therefore, necessary that on the Excise side also we have the same eight-digit classification. What we have found is that eight-digit classification helps both trade and revenue department to Identify a particular product and heading under which it falls. Immediately, the number of disputes comes down very sharply.... . 31. A perusal of the 'Note' appended below the Notification dated 24-2-2005 as well as the statement made by the Hon'ble Finance Minister in Parliament, as referred to above, clearly establishes that the notification has taken care of the technical changes ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ter 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))s 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 Spirit and ENA are covered by exemption Notification. 8.6 The Tribunal in the case of Ugar Sugar Works Vs. CCE 2007 (214) ELT 33 held that with effect from 1.3.2005, Rectified spirit along with denatured spirit would cover under sub-heading No. 2207 2000 and it cannot be said that with effect from 1.3.2005, it became non-excisable. The relevant portion of the said decision is reproduced below:- 4. The appellant manufactures Sugar and Molasses. From the molasses, Rectified spirit is produced. Rectified spirit Is denatured and de-natured spirit is also manufactured. The appell ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... irit 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 Hon'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 spirit), attracting nil rate of duty and which was reported as wastage/storage loss should be reversed as per provisions of Rule 6(3) of the CENVAT Credit Rules, 2004. In the case of Godavari Sugar Mills Ltd. Vs. CCE 2007 (212) ELT 234 it was held that molasses used for manufacture of Rectified spirit and denatured spirit, part of Rectified spirit converted into denatured spirit which is dutiable, benefit of Notification No. 67/95-CE is available provided the manufacturer discharges the obligation prescribed under Rule 6 of the CENVAT Credit Rules. In that case, it was observed that the Rectifi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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