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2018 (8) TMI 1167 - AT - Central ExciseExcisable goods or not? - by-products - Soap stock - soap sludge - Acid Oil - whether ‘Acid Oil’ and ‘Soap Sludge’ which are obtained by further conversion of such Soap Stock would require to be treated as ‘excisable goods’ requiring discharge of Central Excise duty liability? Held that:- The ratio of the Apex Court in Indian Aluminium Company [2006 (9) TMI 6 - SUPREME COURT OF INDIA] and of the various Tribunal’s decisions like Ricela Health Foods Ltd. [2018 (2) TMI 1395 - CESTAT NEW DELHI] and others would squarely apply with regard to ‘soap stock‛, hence it cannot be held as excisable goods and denied benefit of Notification No.89/95-CE. Soap Stock - Acid Oil - Held that:- Soap Stock is consciously again processed by the appellants which results in emergence of Acid Oil and Soap Sludge. It then cannot be said that emergence of acid oil is an unintended by product - the acid oil is an intended final product resulting out of conscious process of soap stock. The said acid oil would then have to be considered as a new product with a different name, character and use, and exigible to excise duty as applicable - duty liability upheld - The manner of calculation of duty liability arrived at in the Annexure to the SCN will then have to be reworked to restrict the assessed liability with interest as applicable, only to clearances of ‘acid oil‛ (during the impugned period). For this limited purpose, the matter is being remanded to the original adjudicating authority. Liability of Interest - Held that:- The interest liability as applicable will be payable on such reworked duty liability. Penalty - Held that:- As the issue on excisability of the by product / waste arising in such refining of vegetable oil was mired in confusion and also in litigation for quite some time till the Larger Bench decision in the case of Ricela Health Foods Ltd. [2018 (2) TMI 1395 - CESTAT NEW DELHI], the ingredients of Section 11AC cannot be foisted on to the appellants. For such reason, the penalty of ₹ 23,81,941/- imposed on the appellants under that Section will require to be set aside. Appeal allowed in part and part matter on remand.
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