2009 (8) TMI 1138 - AT - Central Excise

Bye-product - soap stock and wax emerge - dutiability - N/N. 89/95-CE - Held that - an identical issue was decided by this bench in the case of CCE Hyderabad vs. Priyanka Refineries and other 2009 (5) TMI 419 - CESTAT BANGALORE where it was held that the soap stock which arises/emerges during the refining of vegetable oil is a waste for the respondents though the Revenue may call it as a by-product. Accordingly on merits as well as on the law the Revenue (Appeals) is devoid of merits and are liable to be rejected - appeal rejected - decided against Revenue.

Summary

Issues:
1. Eligibility for exemption under Notification No.89/95-CE for soap stock and wax classified as waste.

Analysis:

The appeal was filed by the revenue against the Order-in-Original (OIA) dated 29.08.2008, where the respondents, engaged in manufacturing vegetable refined oil, classified soap stock and wax as waste exempted under Notification No.89/95. The revenue contended that these products were not waste but had distinct characteristics and commercial use. The Adjudicating Authority confirmed duty, penalties, and interest, but the Commissioner (Appeals) set aside the order based on predecessors' decisions. The revenue argued that the soap stock and wax were not waste but products with marketability. The respondents claimed the issue was settled by previous Tribunal decisions. The Tribunal considered the issue of exemption under Notification No.89/95 for soap stock and wax, citing a similar case involving CCE Hyderabad vs. Priyanka Refineries. The Tribunal found that the soap stock emerging during the refining of vegetable oil was waste for the respondents, despite revenue's classification as a bye-product. The Tribunal upheld the impugned order, stating it did not require interference, as per the established legal principles and previous decisions.

The Tribunal referred to the Supreme Court's decision in C.K. Gangadhran vs. Commr of Income Tax, Cochin, emphasizing that the revenue cannot take an opposite stand in different cases involving identical issues. It highlighted that the lower authorities' decision not to file an appeal indicated a conscious choice, aligning with the Apex Court's rulings. The Tribunal analyzed the nature of soap stock and wax, concluding that they were waste products arising during the refining of vegetable oil, contrary to the revenue's argument of distinct marketability. The Tribunal also referenced the Supreme Court's decision in Khandelwal Metal and Engg Works to support the respondents' position that the soap stock was waste. The Tribunal found the revenue's appeals lacked merit both factually and legally, leading to the rejection of the revenue's appeal and upholding of the impugned order. The Tribunal deemed the issue as no longer res-integra, affirming the correctness and legality of the impugned order without interference.