Custom, Excise & Service Tax Tribunal
Cce, C & St, Hyderabad-Ii vs Oia No. Hyd-Cex-002-App-013-16-17 ... on 1 February, 2018
CUSTOMS, EXCISE AND SERVICE TAX APPELLATE TRIBUNAL REGIONAL BENCH AT HYDERABAD Division Bench Court I Sl. No. Appeal No. Appellant Respondent
Impugned Order
1. E/30967/2016 Saraiwwalla Agrr Refineries Ltd., CCE, C & ST, Hyderabad-II OIA No. HYD-CEX-002-APP-013-16-17 dated 22.07.2016
2. E/30968/2016 Saraiwwalla Agrr Refineries Ltd., CCE, C & ST, Hyderabad-II OIA No. HYD-CEX-002-APP-014-16-17 dated 22.07.2016
3. E/2101/2012 Saraiwwalla Agrr Refineries Ltd., Commissioner of Central Excise, Customs and Service Tax, Guntur OIO No. 39/2012 C.Ex. (Commr.) dated 30.03.2012
4. E/26181/2013 Saraiwwalla Agrr Refineries Ltd., Commissioner of Customs, Central Excise & Service Tax, Guntur OIO No. 02/2013-C.Ex. dated 10.01.2013
5. E/20216/2015 Saraiwwalla Agrr Refineries Ltd., Commissioner of Customs, Central Excise & Service Tax, Guntur OIO No. GUN-EXCUS-000-COM-073-14-15-CE dated 14.10.2014
6. E/22027/2015 Saraiwwalla Agrr Refineries Ltd., Commissioner of Customs, Central Excise & Service Tax, Nellore OIO No. VIZ-EXUCS-003-COM-002-15-16-CE dated 29.05.2015
7. E/31158/2016 Saraiwwalla Agrr Refineries Ltd., Commissioner of Customs, Central Excise & Service Tax, Guntur OIA No. VIZ-EXCUS-003-APP-021-16-17 dated 26.08.2016
8. E/31159/2016 Saraiwwalla Agrr Refineries Ltd., Commissioner of Customs, Central Excise & Service Tax, Nellore OIA No. VIZ-EXCUS-003-APP-022-16-17 dated 26.08.2016
9. E/31160/2016 Saraiwwalla Agrr Refineries Ltd., Commissioner of Customs, Central Excise & Service Tax, Nellore OIA No. VIZ-EXCUS-003-APP-023-16-17 dated 26.08.2016
10. E/31161/2016 Saraiwwalla Agrr Refineries Ltd., Commissioner of Customs, Central Excise & Service Tax, Nellore OIA No. VIZ-EXCUS-003-APP-024-16-17 dated 26.08.2016
11. E/31162/2016 Saraiwwalla Agrr Refineries Ltd., Commissioner of Customs, Central Excise & Service Tax, Nellore OIA No. VIZ-EXCUS-003-APP-025-16-17 dated 26.08.2016
12. E/31155/2017 Saraiwwalla Agrr Refineries Ltd., Commissioner of Central Tax, Guntur- GST OIA No. VIZ-EXCUS-003-APP-023-17-18 dated 17.07.2017
13. E/31298/2017 Saraiwwalla Agrr Refineries Ltd., Commissioner of Central Tax, Rangareddy GST OIA No. HYD-EXCUS-RRC-APP-010-17-18 (APP-I) dated 14.09.2017 Appearance Shri Anwar Ali, Advocate for the Appellant. Shri N.V. Subrahmanyam, (AR) for the Respondent.
Coram:
Honble Mr. M.V. RAVINDRAN, MEMBER (JUDICIAL) Honble Mr. MADHU MOHAN DAMODHAR, MEMBER (TECHNICAL) Date of Hearing: 01/02/2018 Date of Decision: 01/02/2018 FINAL ORDER No. A/30233-30245/2018 [Order per: Bench] Appeal Nos. E/30967 & 30968/2016 are directed against Orders-in-Appeal Nos. HYD-CEX-002-APP-013 and 014-16-17 CE dated 22.07.2016.
2. When these two matters were called out, Learned Counsel Shri Anwar Ali submits that similar/identical matters of the very same appellants are pending before this Bench for adjudication. He produces the list of appeals. We called for cases from the registry and perused the following case papers:
Sl. No. Appeal No. Appellant Respondent Impugned Order
1.
E/2101/2012 Saraiwwalla Agrr Refineries Ltd., Commissioner of Central Excise, Customs and Service Tax, Guntur OIO No. 39/2012 C.Ex. (Commr.) dated 30.03.2012
2. E/26181/2013 Saraiwwalla Agrr Refineries Ltd., Commissioner of Customs, Central Excise & Service Tax, Guntur OIO No. 02/2013-C.Ex. dated 10.01.2013
3. E/20216/2015 Saraiwwalla Agrr Refineries Ltd., Commissioner of Customs, Central Excise & Service Tax, Guntur OIO No. GUN-EXCUS-000-COM-073-14-15-CE dated 14.10.2014
4. E/22027/2015 Saraiwwalla Agrr Refineries Ltd., Commissioner of Customs, Central Excise & Service Tax, Nellore OIO No. VIZ-EXUCS-003-COM-002-15-16-CE dated 29.05.2015
5. E/31158/2016 Saraiwwalla Agrr Refineries Ltd., Commissioner of Customs, Central Excise & Service Tax, Guntur OIA No. VIZ-EXCUS-003-APP-021-16-17 dated 26.08.2016
6. E/31159/2016 Saraiwwalla Agrr Refineries Ltd., Commissioner of Customs, Central Excise & Service Tax, Nellore OIA No. VIZ-EXCUS-003-APP-022-16-17 dated 26.08.2016
7. E/31160/2016 Saraiwwalla Agrr Refineries Ltd., Commissioner of Customs, Central Excise & Service Tax, Nellore OIA No. VIZ-EXCUS-003-APP-023-16-17 dated 26.08.2016
8. E/31161/2016 Saraiwwalla Agrr Refineries Ltd., Commissioner of Customs, Central Excise & Service Tax, Nellore OIA No. VIZ-EXCUS-003-APP-024-16-17 dated 26.08.2016
9. E/31162/2016 Saraiwwalla Agrr Refineries Ltd., Commissioner of Customs, Central Excise & Service Tax, Nellore OIA No. VIZ-EXCUS-003-APP-025-16-17 dated 26.08.2016
10. E/31155/2017 Saraiwwalla Agrr Refineries Ltd., Commissioner of Central Tax, Guntur- GST OIA No. VIZ-EXCUS-003-APP-023-17-18 dated 17.07.2017
11. E/31298/2017 Saraiwwalla Agrr Refineries Ltd., Commissioner of Central Tax, Rangareddy GST OIA No. HYD-EXCUS-RRC-APP-010-17-18 (APP-I) dated 14.09.2017 On perusal of the same we do find that issue is identical in all appeals. Accordingly, all these appeals are taken up for disposal by a common order. Revenue Authorities were also informed at the beginning of the session to go through the case papers called for from registry; Learned Departmental Representative after perusing the records submits the issue is the same.
3. Heard both sides and perused the records.
4. On perusal of records, it transpires that the issue is regarding the demand of duty on the products arising when crude vegetable oil into refined vegetable oils, like Gums/Soap Stock/Wax/muddy/Liquid Sludge/Palm Fatty Acid Distillate etc. Learned Counsel submits that an identical issue in the case of M/s Ricela Health Foods Ltd., and Others were before the Larger Bench of the Tribunal which heard the matter on 15.01.2018 and by an order dated 30.01.2018 held that the appellants are eligible for exemption under Notification No. 89/1995 CE dated 18.05.1995.
5. In all these appeals the appellant had claimed the benefit of the same notification for non discharge of Central Excise duty on the products as indicated herein above. We reproduce the ratio from the Larger Bench decision headed by the Honble President as contained in paragraph No. 10 & 11:
10. In view of the ratio adopted by the Apex Court while arriving at the above decisions, the point for consideration in the present dispute is the gums, waxes and fatty acid that emerge as a by-product can be considered as a products arising out of a manufacturing process. The appellants are engaged in converting crude rice bran oil into refined rice bran oil. In effect the processes undertaken by them are towards this intended final product. For producing refined rice bran oil, the gums and waxes available in the crude rice bran oil are to be removed by de-guming and de-waxing. Thereafter by a process of de-acidification/de-odourisation, by distillation the refined oil is obtained. In this final process fatty acid distillate (fatty acid with odour) is obtained as a waste. As can be seen the gumds, waxes and fatty acid distillate are emerging due to removal/refining process of crude rice bran oil. As already noted the process is to obtain refined rice bran oil by removing these unwanted products along with spent earth, which when present makes the oil as crude refined oil.
11. The thrust of the arguments by the Revenue is that when a product is capable of being sold for a significant consideration the same cannot be considered as waste. We are unable to accept such summary presumption. Admittedly, in chemical and metallurgical industry when the raw materials are processed with an intended purpose of manufacturing certain final products by a chemical reaction, refining, melting etc. multiple products will result. These products either emerged in the final stage or any of the intermediating stages also. The point for consideration is whether these are to be considered as manufactured goods for excise levy based on the statutory definition for manufacture or should be considered as manufactured goods based on the likely value they may command while selling. We are clear that the value that a product may or may not fetch cannot be a determinative factor to decide whether the same is a manufactured final product/by product or a waste/refuse arising during the course of manufacture of final products. This much is clear from the ratio of the Apex Court decision in Indian Aluminium Co. (supra). While no general guidelines can be laid down to decide when a product will be treated as a waste or a by-product, in the present set of facts the products under consideration are clearly not in the nature of by-products emerging during the course of manufacture. The process of manufacturing refined vegetable oil is essentially by removing the unwanted materials that were present in the crude vegetable oil so that a refined vegetable oil can be obtained. In this process of refining, the unwanted materials are removed. Hence, we are of the considered view that the removal of unwanted materials resulting in products like gums, waxes and fatty acid with odour cannot be called as a process of manufacture of these gums, waxes and fatty acid with odour. The process of manufacture is for refined rice bran oil. As such, we note that these incidental products are nothing but waste arising during course of refining of rice bran oil and applying the ratio of Apex court, as discussed above, these cannot be considered as manufactured excisable goods. Noting that the reference is to decide whether these are to be treated as waste for the purpose of exemption Notification 89/95-CE we note though the excisability of the product itself is seriously in dispute as per the opinion expressed by us, as above, these cannot be considered as anything other than waste and as such will be covered by the exemption Notification No. 89/95-CE. This has been pleaded as a alternate argument by the appellant/assessee also.
6. In view of the foregoing, we set aside the impugned orders and allowed the appeals with consequential reliefs, if any.
(Order dictated & pronounced in open court)
MADHU MOHAN DAMODHAR M.V. RAVINDRAN
MEMBER (TECHNICAL) MEMBER (JUDICIAL)
Lakshmi.
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