Customs, Excise and Gold Tribunal - Delhi
Fair Exports (India) Pvt. Ltd. vs Commissioner Of C. Ex. on 23 September, 2003
Equivalent citations: 2003(158)ELT385(TRI-DEL)
ORDER V.K. Agrawal, Member (T)
1. In this appeal, filed by M/s. Fair Exports (India) Pvt. Ltd., the issue involved is whether the benefit of Notification No. 8/97-C.E., dated 1-3-97 as amended, is available in respect of waste in the form of bones obtained during the process of manufacturing boneless meat.
2. Shri Bipin Garg, learned Advocate, submitted that the appellants, a 100% Export Oriented Unit (EOU), at the relevant time, manufacture and export frozen chilled meat; that during the process of manufacture of the boneless meat, waste in the form of bones is generated when meat is separated from the bones; that the Additional Commissioner, under the Order-in-Onginal No. 10/2002, dated 1-5-2002, dropped the proceedings initiated under the show cause notice, dated 28-2-2002 demanding duty by disallowing the exemption under Notification No. 8/97 as amended; that, however, on appeal filed by the Department, the Commissioner (Appeals), under the impugned order, has set aside the Order-in-Original holding that after the amendment of Notification No. 8/97 by Notification No. 13/98-C.E., dated 2-6-98, they are not eligible for the exemption. The learned Advocate, further, submitted that the issue involved in the present appeal is squarely covered by the decision of the Appellate Tribunal in the case of C.C.E., Jaipur-I v. Neelkanth Polymers, 2003 (152) E.L.T. 154 (T) = 2003 (55) RLT 150 (CEGAT), wherein it has been held that proviso to Notification No. 8/97 is not applicable to waste, which is not a finished product. We also heard Shri P.M. Rao, learned D.R.
3. We have considered the submissions of both the sides. Learned Advocate has rightly pointed out that the decision in the case of C.C.E., Jaipur v. Neelkanth Polymers, is squarely applicable to the facts of the present matter. In the said decision, the benefit of Notification No. 8/97-C.E. was disallowed in respect of by-product known as 'churi korma' obtained during the process of manufacture of guar gum powder out of guar seeds. The Tribunal in the said decision has held as under:
"We have considered the submissions of both the sides. Notification No. 8/97-C.E., exempts the finished products, rejects and waste or scrap produced in a 100% E.O.U. wholly from the raw materials produced or manufactured in India and allowed to be sold in India under and in accordance with the provisions of specified Paras of the Export and Import Policy 1997-2002 from so much of the duty of excise as is in excess of an amount equal to the aggregate of the duty of excise leviable under Section 3 of the Central Excise Act or under any other law for the time being in force on like goods produced in India. The proviso bars the benefit of Notification in respect of finished goods if such finished goods manufactured by any unit other than 100% EOU is wholly exempt or chargeable to Nil rate of duty. The impugned product, as per the process of manufacture mentioned by the learned Chartered Accountant and not controverted by the Revenue, is obtained by grinding and screening of guar gum seed. During the process of screening in Chhalnas i.e. sieve, waste material is separated. This waste material is sold as Churi Korma in the market. We agree with the Respondents that the impugned material is only a waste product and not a finished product. The mere fact that it is sold as such in the market without any further processing would not make the impugned product a finished product. It is well known fact that generally the waste products are sold as such only without any further processing. Further, as held by the Apex Court in Union of India v. Indian Aluminium Co. Ltd. [1995 (77) E.L.T. 268 (S.C.) = 1995 (8) RLT 421 (S.C.) even rubbish can be sold and everything which is sold is not necessarily a marketable commodity. Accordingly, the fact of selling of Churi Korma will not make it a finished product. Thus the mischief of proviso to Notification No. 8/97-C.E., dated 1-3-97 is not attracted in respect of Churi Korma as it is a waste product and the proviso is applicable only to 'finished product'. Accordingly we find no reason to interfere with the impugned Order and reject the appeal filed by the Revenue."
4. Similarly, in the present matter bones are obtained as waste during the process of manufacture of boneless meat and this cannot be treated as a finished product. Accordingly, relying upon the decision in the case of Neelkanth Polymers, we set aside the impugned order and allow the appeal.