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2023 (6) TMI 951 - CESTAT KOLKATAProcess amounting to manufacture - SSI exemption benefit - demand with interest and equal penalty - Period involved in the dispute is November 1987 to February 1994. Process amounting to manufacture - processes of recrystallisation and distillation did not bring in any new excisable product - HELD THAT:- Distillation is a process of evaporation and re-condensation used for separating liquids into various fractions according to their boiling points or boiling ranges. Fractional distillation is a distillation process for the separation of the various components of liquid mixtures. At different temperatures, various components of liquid mixtures emerge at different stages of fractional distillation process. Such components arising in course of fractional distillation process can be distinctly different from the parent raw materials. The emergent products can have different name, character and use. However, the processes of recrystalisation and distillation undertaken by the Appellant cannot be called fractional distillation. There is no evidence available on record to show that various components of liquid mixtures emerged at different stages in the process undertaken by the Appellant - the findings of the adjudicating authority in the impugned order is not supported by any evidence. It is also observed that the appellant did not avail MODVAT Credit as per the decision of the Department that their processing of Coal Tar does not amount to ‘manufacture’as persection 2(f) of the Central Excise Act. 1944 - thus the processes undertaken by the Appellant would not amount to manufacture within the meaning of Section 2(f) of Central Excise and Salt Act, 1944 and hence the finished goods are not leviable to Central Excise duty. Accordingly, the demand made in the impugned order is liable to be set aside. Eligibility of SSI Exemption - HELD THAT:- The department contended that the benefit of SSI exemption has been allowed while working out aggregate value of clearances in each financial year during the material period. However, since the processes undertaken by the Appellant does not amount to manufacture and the demand itself is not sustainable, the eligibility of SSI Exemption would not make any difference. Appeal allowed.
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