Custom, Excise & Service Tax Tribunal
Chandigarh Ii vs Ricela Health Foods Ltd on 16 January, 2026
CUSTOMS, EXCISE AND SERVICE TAX APPELLATE TRIBUNAL
CHANDIGARH
REGIONAL BENCH - COURT NO. I
Excise Appeal No. 52851 of 2015
[Arising out of Order-in-Appeal No. JAL-EXCUS-000-APP-024-15-16 dated
06.05.2015 passed by the Commissioner (Appeals), Central Excise, Chandigarh-II]
Commissioner of Central Excise and ...Appellant
Service Tax, Chandigarh-II
Central Revenue Building, Plot No. 19,
Sector 17-C, Chandigarh 160017
VERSUS
M/s Ricela Health Foods Ltd ...Respondent
Saron Road, Dhuri, Sangrur, Punjab 148024 WITH Excise Appeal No. 50446 of 2015 [Arising out of Order-in-Appeal No. JAL-EXCUS-000-APP-169-14-15 dated 28.10.2014 passed by the Commissioner (Appeals), Central Excise, Chandigarh-II] Commissioner of Central Excise and ...Appellant Service Tax, Chandigarh-II Central Revenue Building, Plot No. 19, Sector 17-C, Chandigarh 160017 VERSUS M/s Ricela Health Foods Ltd ...Respondent Saron Road, Dhuri, Sangrur, Punjab 148024 AND Excise Appeal No. 52852 of 2015 [Arising out of Order-in-Appeal No. JAL-EXCUS-000-APP-025-15-16 dated 06.05.2015 passed by the Commissioner (Appeals), Central Excise, Chandigarh-II] Commissioner of Central Excise and ...Appellant Service Tax, Chandigarh-II Central Revenue Building, Plot No. 19, Sector 17-C, Chandigarh 160017 VERSUS M/s A.P. Organics Pvt Ltd ...Respondent Saron Road, Dhuri, Sangrur, Punjab 148024 2 E/52851/2015 with E/50446/2015 & E/52852/2015 with E/50364/2015 WITH Excise Appeal No. 50364 of 2015 [Arising out of Order-in-Appeal No. JAL-EXCUS-000-APP-168-14-15 dated 27.10.2014 passed by the Commissioner (Appeals), Central Excise, Chandigarh-II] Commissioner of Central Excise and ...Appellant Service Tax, Chandigarh-II Central Revenue Building, Plot No. 19, Sector 17-C, Chandigarh 160017 VERSUS M/s A.P. Organics Pvt Ltd ...Respondent Saron Road, Dhuri, Sangrur, Punjab 148024 APPEARANCE:
Mr. Anurag Kumar, Ms. Amita Gupta and Mr. Yashpal Singh, Authorized Representatives for the Appellant Ms. Krati Singh, Mr. Aman Singh and Mr. Monarch Mittal, Advocates for the Respondents CORAM: HON'BLE MR. S. S. GARG, MEMBER (JUDICIAL) HON'BLE MR. P. ANJANI KUMAR, MEMBER (TECHNICAL) FINAL ORDER NO. 60049-60052/2026 DATE OF HEARING: 19.09.2025 DATE OF DECISION: 16.01.2026 S. S. GARG :
These four appeals filed by the Revenue are directed against different impugned OIAs, details as in the table below, passed by the Commissioner (Appeals), Central Excise-II, whereby the learned Commissioner (Appeals) has set aside the OIOs and allowed the refund, subject to verification. Appeal-wise details are as under in the tabular form:
3 E/52851/2015 with E/50446/2015 & E/52852/2015 with E/50364/2015 Appeal E/50364/2015 E/52852/2015 E/50446/2015 E/52851/2015 No. Relevant 01.01.2013 to 01.10.2013 to 01.01.2013 to 01.10.2013 to Period 30.09.2013 31.03.2014 30.09.2013 31.03.2014 SCN 26.03.2014 11.08.2014 26.03.2014 11.08.2014 dated OIO 04.06.2014 29.10.2014 02.06.2014 29.10.2014 dated OIA 27.10.2014 06.05.2015 28.10.2014 06.05.2015 dated Refund Rs.80,56,172 Rs.69,04,265 Rs.6,20,31,787 Rs.3,85,89,406 Since, the issue involved in all these four appeals is identical, therefore, all appeals are taken up together for the purpose of discussion and decisions. For the sake of convenience, we are taking Appeal No. 'E/52851/2015' as a lead case.
2. Briefly stated facts of the present case are that the Respondents were engaged in manufacture of Refined Bran Oil falling under sub-heading 15159040 of the Central Excise Tariff Act, 1985, which is exempted from payment of duty vide Notification No. 03/2006-CE dated 01.03.2006. During the process of manufacturing of Refined Bran Oil, certain by-products namely Fatty Acids, Gums & Waxes were generated. For the period October 2013 to March 2014, the Respondents had paid duty though under protest on the clearance of Fatty Acids, Gums & Waxes on the plea that -
(a) Fatty Acids, Gums & Waxes are exempted under Notification No. 89/95-CE dated 18.05.1995,
(b) Fatty Acids, Gums & Waxes fall under Chapter 38237090 & 15159099 respectively being the fractions of oils and fats, and 4 E/52851/2015 with E/50446/2015 & E/52852/2015 with E/50364/2015
(c) No manufacturing activity is involved in the generation of Fatty Acids, Gums & Waxes, hence, there was no duty liability.
The Respondents had filed refund claims along with copies of invoices showing duty payment under protest. After following the due process, the Adjudicating Authority vide OIOs rejected the refund claim. Aggrieved by the said OIOs, the Respondents filed appeals before the Commissioner (Appeals), who vide the impugned OIAs, has allowed the appeals of the Respondents and directed the Adjudicating Authority to determine amount of duty paid by the Respondents to the extent that the incidence of the same has not been passed on to any other person. Being aggrieved by the impugned OIAs, the Revenue has preferred the present appeals.
3. Heard both the sides and perused the material on records.
4. The learned Authorized Representative for the Revenue submits that the impugned OIAs are not sustainable in law as the same have been passed without properly appreciating the facts & the law and binding judicial precedents.
4.1 He further submits that the Notification No. 03/2006-CE dated 01.03.2006 exempts the Refined Rice Bran Oil from payment of central excise duty, but no such exemption was given for other goods, produced during the manufacture of the oil, such as Gums, Waxes and Fatty Acids etc, which clearly shows that these products of oil mill and solvent extraction industries were made dutiable w.e.f. 01.03.2006. He also submits that Gums and Waxes are manufactured products and are liable to central excise duty and are classifiable 5 E/52851/2015 with E/50446/2015 & E/52852/2015 with E/50364/2015 under Chapter 15 and therefore, not liable for exemption under Notification No. 03/2006-CE dated 01.03.2006. 4.2 He further submits that the issue involved in the present case has already been decided in favour of the department by the Tribunal vide its Final Order No. 648-661/2011 dated 25.07.2011 in the case of CCE vs. A.G. Fats Ltd & others - [2012 (277) ELT 96 (Tri. Del.)]. He further submits that the said decision of the Tribunal has been upheld by the Hon'ble Apex Court vide its Order dated 02.01.2012 in the case of A.P. Solvex Ltd vs. Commissioner - [2014 (300) ELT A74 (SC)]. He further submits that the Commissioner (Appeals) has not considered the binding nature of the said order and relied upon the other decisions of the Tribunal and Courts to allow the refund to the Respondents.
5. On the other hand, the learned Counsel for the Respondents submits that the issue involved in the present case has an historical background; the Revenue across the entire industry for various assessees, contended that by-products are manufactured goods and hence, are liable to excise duty since they have distinct commercial identity and value.
5.1 She further submits that the department agitated the issue before the Tribunal, wherein the Tribunal in the case of CCE vs. Priyanka Refineries Ltd - [2010 (249) ELT 70 (Tribunal)] held that the soap stock arising during manufacture of refined edible oil is considered to be "waste" and not a "by-product", hence, is exempted under Notification No. 89/95-CE dated 18.05.1995. She further submits that the said decision of the Tribunal was affirmed by the 6 E/52851/2015 with E/50446/2015 & E/52852/2015 with E/50364/2015 Hon'ble Apex Court vide its Order dated 07.01.2010 reported as - 2011 (274) ELT A16 (SC).
5.2 She further submits that this issue again reached before the Tribunal in the case of CCE vs. A.G. Fats Ltd and others (supra), wherein the Tribunal departed from earlier decision of the co-ordinate bench and concluded that these by-products do not constitute "waste" because they have commercial value and are not fit to be discarded, hence, are dutiable. She further submits that the said matter travelled to the Hon'ble Supreme Court and the civil appeals were dismissed by the Hon'ble Supreme Court vide its Order dated 02.01.2012 in the case of A.P. Solvex Ltd (supra). 5.3 She further submits that Mumbai Bench of the Tribunal in the case of Maheshwari Solvent Extraction Ltd vs. CCE, Nagpur - [2014 (299) ELT 116 (Tri. Mumbai)] took a contrary view and held that Fatty Acids, Waxes & Gums, emerging in course of refining of crude vegetable oil, are in the nature of "waste" and would be eligible for exemption under Notification No. 89/95-CE dated 18.05.1995.
5.4 Further, she also submits when the civil appeals were dismissed by the Hon'ble Supreme Court, the Respondent (who were also the party to that bunch of appeals) started paying duty under protest from January 2012 and also intimated about the same to the department vide letters; thereafter, refund applications were filed by the Respondents along with copy of invoices and letters; thereafter, SCNs were issued to the Respondents proposing rejection of the refund applications; and after following the due process, the 7 E/52851/2015 with E/50446/2015 & E/52852/2015 with E/50364/2015 Adjudicating Authority vide the OIOs, also denied the refund claims on the ground that since the said products were marketable, they had to be treated as excisable products chargeable to excise duty; however, on appeal, the Commissioner (Appeals) has allowed the refund claims of the Respondents.
5.5 She further submits that this issue is now no more res integra and has been decided in favour of the assessees-Respondents by the various decisions of the Tribunal. She further submits that the issue whether the said products, generated during manufacture of the final product, are exempted from payment of excise duty or not, has already been decided in favour of the assessees-Respondents in Respondents' own case by the Larger Bench of the Tribunal in Ricela Health Foods Ltd vs. CCE - [2018 (361) ELT 1049 (Tri. LB)] which has been affirmed by the Hon'ble Supreme Court in the case of CCE vs. Marico Ltd - [2022 (382) ELT 436 (SC)]. She also submits that the same position has also been further confirmed by the Tribunal in the Respondents' own case in Ricela Health Foods Ltd vs. CCE - [2020 (372) ELT 142 (Tri. Chan.)]. She also submits that in view of the settled position of law, the Tribunal and High Court in the following cases, have held that the products, generated during manufacture of final product, shall be exempted from payment of excise duty being "waste" under Notification No. 89/95-CE dated 18.05.1995:
Commr of CGST, Chennai Outer vs. D. Ramamurthy, SSD Oil Mills Company Ltd - [2021 (12) TMI 478 Madras High Court] M/s Raj Agro Mills Ltd vs. CCE, Ludhiana - [2025 (6) TMI 427 CESTAT Chandigarh] 8 E/52851/2015 with E/50446/2015 & E/52852/2015 with E/50364/2015 M/s Dhillon Oil & Fats Pvt Ltd, M/s Tara Health Foods Limited vs. CCE, Chandigarh-II - [2023 (12) TMI 1445 CESTAT Chandigarh] M/s Kissan Fats Ltd, M/s BCL Industries & Infrastructure Ltd, M/s Sangrur Agro Ltd vs. CCE, Chandigarh-II - [2023 (9) TMI 914 CESTAT Chandigarh] CCE, Ludhiana vs. Shree Jindal Proteins Ltd, M/s Sangrur Agro Ltd - [2018 (3) TMI 915 CESTAT Chandigarh] 5.6 She also submits that the impugned products are exempted from levy of excise duty under the Notification No. 89/95-CE dated 18.05.1995. Further, she also submits that it is not disputed that the Respondents are not intending to specifically manufacture the said products, however, the same get generated during the process of manufacture of the final product. Further, she also submits that the said products are not by-products of the final product, rather they are "waste" generated during refining process of the final product as held in the above cited decisions.
5.7 As regards the unjust enrichment, she submits that the duty paid by the Respondents on clearance of the said products, was borne by the Respondents themselves to the extent of Rs.7,24,63,725/- and remaining amount of Rs.4,31,17,905/- has already been declared by the Respondents to be passed on to the customers, which is evident from the CA Certificate enclosed by the Respondents before the Commissioner (Appeals); the invoices submitted by the Respondents before the Commissioner (Appeals) have also been duly examined and vide the impugned OIAs, it has been confirmed that the incidence of the duty has further not been passed by the Respondents to its customers. She further submits that though the Commissioner (Appeals) has clearly directed the department to determine the extent of duty of incidence that has not been passed 9 E/52851/2015 with E/50446/2015 & E/52852/2015 with E/50364/2015 by the Respondents to its customers, within the 15 days from the receipt of the impugned OIAs; but no contrary evidence has been brought forward by the department in the present case, therefore, the allegation of unjust enrichment is not sustainable. In this regard, she relies on the following decisions, wherein it has been held that the department cannot disregard the evidence produced by the assessees for passing the test of unjust enrichment without producing contrary evidence:
M/s Fresenius Kabi Oncology Ltd vs. CCE, Chandigarh - [2025 (2) TMI 255 CESTAT Chandigarh] M/s Gillette India Ltd vs. CCE, Chandigarh - [2023 (11) TMI 154 CESTAT Chandigarh] M/s Tejas Network Ltd vs. CCE, Bangalore - [2023 (7) TMI 778 CESTAT Bangalore] M/s Indian Oil Corp Ltd vs. CCE & ST - [2019 (370) ELT 487 (Tri. Ahmd.)] CCE & ST, Rohtak vs. Gawar Construction Ltd - [2020 (373) 298 (P&H)] Tirumala Bearing Pvt Ltd vs. CCE, Visakapatnam - [2016 (335) ELT 145 (Tri. Bang.)] CCE, Surat-II vs. Binakia Synthetics Ltd - [2013 (294) ELT 156 (Tri. Ahmd.)] M/s Savita Oil Technologies Ltd vs. CCE, Belapur - [2023 (2) TMI 1225 CESTAT Mumbai] CCE & ST, Rohtak vs. Saint Gobain Gyproc India Ltd -
[2017 (4) TMI 851 P&H High Court] National Steel Agro Industries Ltd vs. CC (Import), Mumbai - [2020 (371) ELT 551 (Tri. Mumbai)] CC, New Delhi vs. Organan India Ltd - [2008 (231) ELT 201 (SC)] Man Truck & Bus India P Ltd vs. CCE, Indore - [2021 (375) ELT 590 (Tri. Del.)] CCE, Coimbatore vs. El P Em Industries - [2017 (356) ELT 565 (Mad.)]
6. We have considered the submissions made by both the parties and perused the material on record as well as various decisions relied upon by both the sides. We find that the only issue involved in these appeals is whether the denial of refund claims of the duty paid on 10 E/52851/2015 with E/50446/2015 & E/52852/2015 with E/50364/2015 clearance of Fatty Acids, Gums & Waxes, generated as waste products during the manufacture of Refined Rice Bran Oil is justified or not?
7. We also find that the only ground raised by the Revenue in the grounds of appeal is that this issue has been decided by the Tribunal in favour of the department in the case of CCE vs. A.G. Fats Ltd & others - [2012 (277) ELT 96 (Tri. Del.)] which has held that the said by-products are dutiable as they have distinct commercial identity and value; the said decision of the Tribunal has been affirmed by the Hon'ble Apex Court also, reported as - 2014 (300) ELT A74 (SC).
8. We also find that this issue was again considered by the Tribunal in various cases and finally, in the Respondents' own case, report as - 2018 (361) ELT 1049 (Tri. LB), the Larger Bench of the Tribunal has held that these products generated during the manufacture of the final product, are exempted from payment of duty; the said decision has also been affirmed by the Hon'ble Apex Court, reported as - 2022 (382) ELT 436 (SC). We also find that further this Tribunal in Respondents' own case, reported as - 2020 (372) ELT 142 (Tri. Chan.), has followed the above said decision of the Tribunal and allowed the appeal of the assessee.
9. Further, we find that subsequently, by following the ratio of the decision of the Larger Bench, which is upheld by the Hon'ble Supreme Court, the Tribunal in various decisions has held that the products generated during the manufacturing process of the final product, shall be exempted from payment of duty being waste under the 11 E/52851/2015 with E/50446/2015 & E/52852/2015 with E/50364/2015 Notification No. 89/95-CE dated 18.05.1995. Therefore, in view of the settled position, we hold that there is no force in the appeals filed by the Revenue.
10. Further, as regards the unjust enrichment, we note that the Respondents have produced the CA Certificate showing as to how much duty has been passed on the buyers and how much duty has been borne by themselves separately, which has been noted by the learned Commissioner (Appeals) also in the impugned OIAs. Though the learned Commissioner (Appeals) has directed the department to determine the extent of duty of incidence that has not been passed by the Respondents to its customers, within 15 days from the receipt of the impugned OIAs, but no contrary evidence has been brought forward by the department, therefore, the allegation of unjust enrichment is not sustainable in the present case, in view of the various decisions cited above.
11. In view of our discussion above and by following the ratio of the decision of the Larger Bench (cited above) which is affirmed by the Hon'ble Supreme Court, we do not find any merits in the appeals filed by the Revenue, hence, the same are dismissed.
(Order pronounced in the open court on 16.01.2026) (S. S. GARG) MEMBER (JUDICIAL) (P. ANJANI KUMAR) MEMBER (TECHNICAL) RA_Saifi