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2011 (7) TMI 968 - AT - Central ExciseBy product versus waste - Whether the fatty acids/soap stock, waxes and gums obtained in course of refining of the vegetable oils are eligible for duty exemption under the Notification No. 89/95-C.E - It is a statutory obligation of the manufacturers of refined vegetable oil and vanaspati to remove free fatty acids, gums and waxes, as these substances are toxic substances - Held that:- The waxes and gums obtained in course of refining is covered by heading 1522. As regards soap stock, the same would also be covered by Heading 1522, as, as per HSN Explanatory Notes of heading 1522, this heading among other things, covers soap stocks which are the by-product of oil refining, produced by neutralisation of free fatty acids with a base (sodium hydroxide) and consist of mixture of crude soap, natural oils or fats. As regards, fatty acids obtained in course of refining, the same by virtue of Chapter Note 1(e) to Chapter 15 are excluded from the purview of Chapter 15 and the same are specifically covered by Heading 3823. Therefore, each of the three by-products, soap stock/fatty acids, waxes and gums are the manufactured products covered by Central Excise Tariff and since it is not under dispute that the same are marketable, the same have to be treated as excisable product chargeable to Central Excise Duty. A distinction has to be made between the term ‘by-product’ and the term ‘waste.’ - The by-product would be waste only if it is of no value or negligible value something which the manufacture would want to get rid of - Held that: the products, in question, have not been shown to be of no value or negligible value which have only to be discarded, the same would not be eligible for exemption under Notification No. 89/95-C.E - Decided against the assessee
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