2023 (9) TMI 914 - AT - Central Excise

Waste item or not - fatty acids acid oils gum and sludge waxes and spent earth etc. - benefit of N/N. 89/95-CE dated 18.09.1995 denied - Applicability of the Notification No.10/96 dated 23.07.1996 to the plastic/ tin containers manufactured by the appellants - HELD THAT - The issues raised in the impugned orders are no longer res integra after the decision of the Larger Bench in the case of M/S RICELA HEALTH FOODS LTD. M/S J.V.L. AGRO INDUSTRIAL LTD. M/S KISSAN FATS LIMITED VERSUS CCE CHANDIGARH ALLAHABAD 2018 (2) TMI 1395 - CESTAT NEW DELHI where it was held 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. As submitted by both sides the decision of Larger Bench was affirmed by the Hon ble Supreme Court in the case of COMMISSIONER OF CENTRAL EXCISE CHANDIGARH-I VERSUS MARICO LTD. 2022 (10) TMI 1174 - SC ORDER . Coming to the Department s contention that the decision in the case of COMMISSIONER OF CENTRAL EXCISE JALANDHAR VERSUS AG FLATS LTD. 2011 (7) TMI 968 - CESTAT NEW DELHI which was affirmed by Hon ble Supreme Court was not discussed by the Larger Bench will not be of any avail as the decision in the case of M/s Marico Limited is the latest one and requires to be followed therefore by following the principles of judicial discipline it is opined that waste gums fatty acids etc. arising during the course of manufacture of vegetable oils are eligible for the exemption Notification No.89/95. Applicability of the Notification No.10/96 dated 23.07.1996 to the plastic/ tin containers manufactured by the appellants - HELD THAT - Whatsoever that plastic/ tin containers manufactured and used for packing of the final products i.e. vegetable oils are eligible for exemption Notification No.10/96 dated 23.07.1996. All the appeals are allowed.

Summary

Issues Involved:
1. Eligibility for exemption under Notification No. 89/95-CE dated 18.09.1995.
2. Eligibility for exemption under Notification No. 10/96-CE dated 23.07.1996.

Summary:

1. Eligibility for Exemption under Notification No. 89/95-CE:

The appellants, manufacturers of vegetable oils, availed the benefit of Notification No. 89/95-CE for by-products such as fatty acids, acid oils, gum, sludge, waxes, and spent earth. The Department contended that these items do not qualify as waste under the said notification. The appellants argued that the issue is settled by various Tribunal and Supreme Court decisions, including the Larger Bench decision in Ricela Health Foods Limited, which held that these by-products are eligible for exemption. The Tribunal affirmed this view, stating that these by-products are waste arising during the manufacture of vegetable oils and thus eligible for exemption under Notification No. 89/95-CE.

2. Eligibility for Exemption under Notification No. 10/96-CE:

In respect of Appeal Nos. E/61359/2018, E/61462/2018, and E/60671/2019, the Department disputed the availment of Notification No. 10/96-CE on plastic/tin containers manufactured and captively used by the appellants. The Commissioner (Appeals) and this Bench in previous orders held that these containers are eligible for exemption. The Tribunal reiterated that plastic/tin containers manufactured and used for packing vegetable oils are eligible for exemption under Notification No. 10/96-CE.

Conclusion:

The Tribunal allowed all the appeals, confirming that the by-products arising during the manufacture of vegetable oils are eligible for exemption under Notification No. 89/95-CE, and plastic/tin containers used for packing are eligible for exemption under Notification No. 10/96-CE. The miscellaneous application was also disposed of.