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2018 (2) TMI 1395 - AT - Central ExciseWaste - N/N. 89/95-CE - Whether fatty acids, wax and gum arising in course of manufacture of refined vegetable oil are to be treated as “waste” for the purpose of exemption N/N. 89/95-CE and would be exempt from duty under this notification? Held that: - The appellants are engaged in converting crude rice bran oil into refined rice bran oil. In effect the processes undertaken by them are towards this intended final product. For producing refined rice bran oil, the gums and waxes available in the crude rice bran oil are to be removed by deguming and de-waxing. Thereafter by a process of deacidification/ de-odourisation, by distillation the refined oil is obtained. In this final process fatty acid distillate (fatty acid with odour) is obtained as a waste. As can be seen the gums, waxes and fatty acid distillate are emerging due to removal/refining process of crude rice bran oil - the process is to obtain refined rice bran oil by removing these unwanted products alongwith spent earth, which when present makes the oil as crude refined oil. The process of manufacturing refined vegetable oil is essentially by removing the unwanted materials that were present in the crude vegetable oil so that a refined vegetable oil can be obtained. In this process of refining, the unwanted materials are removed. Hence, we are of the considered view that the removal of unwanted materials resulting in products like gums, waxes and fatty acid with odour cannot be called as a process of manufacture of these gums, waxes and fatty acid with odour. The process of manufacture is for refined rice bran oil. Noting that the reference is to decide whether these are to be treated as waste for the purpose of exemption N/N. 89/95-CE we note though the excisability of the product itself is seriously in dispute as per the opinion expressed by us, as above, these cannot be considered as anything other than waste and as such will be covered by the exemption N/N. 89/95-CE. The appellant/assessee are eligible for exemption under the said notification - appeal returned to the regular Division Bench for decision on the points raised in the respective appeals.
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