Central Excise - Excisability of ethyl alcohol - Rectified spirit/special denatured spirit/ordinary denatured spirit - Issue of show cause notices for the period prior to 1-3-1989 - Classification regarding - Central Excise - 55/89

Central Excise - Excisability of ethyl alcohol - Rectified spirit/special denatured spirit/ordinary denatured spirit - Issue of show cause notices for the period prior to 1-3-1989 - Classification regarding Circular No. 55/89 Dated 18-9-1989 [From F.No. 83/12/89-CX.3] Government of India Ministry of Finance (Department of Revenue) Central Board of Excise Customs, New Delhi Subject : Central Excise - Excisability of ethyl alcohol - Rectified spirit/special denatured spirit/ordinary denatured spirit - Issue of show cause notices for the period prior to 1-3-1989 - Classification regarding. Certain doubt have been expressed about the excisability of ethyl alcohol commonly known as industrial alcohol for the period prior to 1-3-1989. It has also been represented by the trade that, in some of the Central Excise Collectorates, demands in respect of Central Excise duty payable on ethyl alcohol commonly known as industrial alcohol, have been raised for the period prior to 1-3-1989. 2. The issue regarding excisability of ethyl alcohol/industrial alcohol has been examined by the Board. A survey floated among the field formations with regard to the position of control and levy of duty on rectified spirit and industrial alcohol etc. by State excise authorities indicates that in majority of cases the manufacture of rectified spirit/industrial alcohol etc. is under the control of State authorities. As you are aware, heading 22.04 was deleted from the Central Excise Tariff with effect from 12-5-1989 by the Finance Act, 1989. While the issue whether rectified spirit/industrial alcohol etc. which is not of I.C. engine grade is covered by Tariff Item No. 6(ii) of the old CET and Heading No. 22.04 of the Schedule to the Central Excise Tariff Act, 1985 is still being debated, a few Writ Petitions have been filed in the Supreme Court challenging the control exercised by the State Governments over the activity of manufacture of industrial alcohol, rectified spirit etc. in the Writ Petitions, it has been contended that the power to levy duty on industrial alcohol etc. vests only with the Central Government but not State Governments. 3. The Board is, therefore, of the view that it would only be appropriate to wait for the Supreme Court's judgment in the said Writ Petitions and not to adjudicate the show cause notices issued in this regard till the cases are decided by the Supreme Court. 4. The above guidelines may be brought to the notice of the lower field formations and the trade interest may also be suitably advised.