TMI Blog2013 (7) TMI 51X X X X Extracts X X X X X X X X Extracts X X X X ..... of co-equal Benches and Co- ordinate benches – As per The State of Gujarat Versus Raipur manufacturing co. Ltd. [1966 (9) TMI 82 - SUPREME COURT OF INDIA] - the judgment which states the law accurately has to be followed and mere incidence of time whether the judgments of co-equal benches are earlier or later is hardly relevant. - Decided in favor of assessee. Decision in A G Flats (2011 (7) TMI 968 - CESTAT, NEW DELHI) distinguished wherein it was held that, the spent earth arising in course of refining of oil, being of no value, is not a new product or a by-product. - E/1053, 961, 714/11-Mum - A/363-365/13/EB/C-II - Dated:- 13-5-2013 - Ashok Jindal And P K Jain, JJ. For the Appellant : Shri C Harishankar, Adv. For the Respondent : Shri Navneet, Additional Commissioner (AR) Per: Ashok Jindal: In these appeals the appellants have challenged the impugned order denying the benefit of Notification No.89/95-CE dated 18.5.1999 on the ground that the subject goods namely residues in the form of Gums/waxes and Recovered Oil/Fatty Acids are marketable. 2. Brief facts of the case are that the Appellant is engaged in the manufacture of Refined Rice Bran Oil, which ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the powers conferred by sub-section (1) of section 5A of the Central Excises and Salt Act, 1944 (1 of 1944), the Central Government, being satisfied that it is necessary in the public interest so to do, hereby exempts waste, parings and scrap arising in the course of manufacture of exempted goods and falling within the Schedule to the Central Excise Tariff Act, 1985 (5 of 1986), from the whole of the duty of excise leviable thereon which is specified in the said Schedule. The issue whether the impugned goods are waste for the purposes of Notification 89/95-CE or not, cannot be decided on account of marketability. This is for the simple reason that exemption pre-supposes excisability which, in its turn, pre-supposes marketability. Non-marketability cannot, therefore, be the test for deciding whether the goods in question satisfy of the definition of "waste" for the purposes of Notn 89/95-CE. Else, the exemption itself would become redundant and futile. Therefore, the stand taken by the revenue is erroneous and such interpretation would result in absurdity or redundancy. The waste exempted in public interest vide said notification is necessarily only such waste which is marketab ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... any part of the duty of excise leviable thereon: Provided that, unless specifically provided in such notification, no exemption therein shall apply to excisable goods which are produced or manufactured: (i) in a free trade zone and brought to any other place in India; or (ii) by a hundred per cent export-oriented undertaking and allowed to be sold in India. Explanation.- In this proviso, "free trade zone" and "hundred per cent export-oriented undertaking" shall have the same meanings as in Explanation 2 to sub-section (1) of section 3. (2) If the Central Government is satisfied that it is necessary in the public interest so to do, it may, by special order in each case, exempt from payment of duty of excise, for reasons to be stated in such order, any excisable goods of strategic or secret nature, or for charitable purpose, on which duty is leviable. (3) An exemption under sub-section (1) or sub-section (2) in respect of any excisable goods from any part of the duty of excise leviable thereon (the duty of excise leviable thereon being hereinafter referred to as the statutory duty) may be granted by providing for the levy of a duty on such goods ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the goods are notified under Section 3A of the Act for charging duty on capacity of the production. The Constitutional Bench of the Hon'ble Apex Court in the case of Chhotabhai Jethabhai Patel v Union of India - 1999 (110) ELT 118 (S.C.) held that excise duty is a tax levy on home produced goods of a specified class or description, the duty being calculated according to the quantity or value of the goods and which is levied because of the mere fact of the goods having been produced or manufactured. And also held that - "In our view, a duty of excise is a tax-levy on home-produced goods of a specified class or description, the duty being calculated according to the quantity or value of the goods and which is levied because of the mere fact of the goods having been produced or manufactured and unrelated to and not dependent on any commercial transaction in them. The duty in the present case satisfies this test and therefore it is unnecessary to seek other grounds for sustaining the validity of the tax." 8. Therefore if the waste referred in the exemption notification shall be of no value, it would not even otherwise, command any excise duty so that no question of its exempti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... " and "intermediate part". So read, it is clear that the word "consumables" therein refers only to material which is utilized as an input in the manufacturing process but is not identifiable in the final product by reason of the fact that it has got consumed therein. It is for this reason that "consumables" have been expressly referred to in the said provisions, though they would fall within the broader scope of the words "raw material". Since the natural gas used by the appellant does not tend to the making of the end product, it is not a "consumable". Therefore the word "waste" has to be read as being similar character to the words "Scrap and parings are marketable and having the value in commercial trade. 9.2 In the case of State of Gujarat vs. Raipur Manufacturing Co.Ltd. - (1967) 1 SCR 618 : AIR 1967 SC 1066 wherein the Hon'ble Apex Court has observed as under:- "11. Waste caustic liquor" is also regularly and continuously accumulated in the tanks in the process of mercerization of cloth. As pointed out by the High Court, sodium hydroxide in water is used in different processes for mercerization of cloth. The liquid is kept in a tank in which cloth is dipped. After th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gligible value. 14. We do not find any substance in these arguments as in the case of BPCL (supra) the Hon'ble Supreme Court has observed as under:- "16. the assessee would be entitled to the set off claimed even on the basis of the taxable sales of acid sludge effected by it. .There is also no evidence on record to suggest, at least so far as acid sludge is concerned, that it is not a commercial commodity with a market but an item of waste .. 17. Equally, the entire sulphuric acid has gone into the composition of the acid sludge. The 3048.760 M.T. of acid have dissolved the impurities in the crude oil and conglomerated with them to constitute 3541.485 M.T. of acid sludge. Having regard to the nature of the interactions here, it is incontrovertible that the entire sulphuric acid purchased has gone into the manufacture of the sludge. The rules do not require that the purchased goods must have been used only for the manufacture of taxable goods for sale. In this situation, it is not possible to cut down the quantum of relief clearly outlined in the rule on the basis of some general principle claimed to underlie the provision." 14.1 Therefore it i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Neither the notification talks about waste of nil or negligible value nor it restricts its application to SSI units. Although the Dictionary meaning as well as the judicial pronouncement include by product arising in the course of manufacturing proves within the ambit and scope of expression waste, the exemption notification do not expressly excludes by-product' from the ambit and scope of term waste, pairing and scrap arising in the course of manufacturing of exempted goods. Therefore, the appellant are entitled to the benefit even as per strict interpretation and can't be deprived there from by resorting to impetrative process as suggested by Revenue and by reading into exempt notification. Such words are not contained in the notification. If it is permitted, the purpose and object of the notification shall be defeated. Liberal interpretation wherever necessary can only be given to a beneficial notification in favour of assessee and not against it. The same is observed by the Hon'ble Supreme Court in the following cases:- (a) Commissioner of Customs v. Malwa Industries Ltd. - 2009 (235) ELT 214 (SC) wherein it was observed that - "10. An exemption notification sho ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is against all principles of interpretation of an exemption Notification. "16. It is settled law that the notification has to be read as a whole. If any of the conditions laid down in the notification is not fulfilled, the party is not entitled to the benefit of that notification. The rule regarding exemptions is that exemptions should generally be strictly interpreted but beneficial exemptions having their purpose as encouragement or promotion of certain activities should be liberally interpreted. This composite rule is not stated in any particular judgment in so many words. In fact, majority of judgments emphasise that exemptions are to be strictly interpreted while some of them insist that exemptions in fiscal statutes are to be liberally interpreted giving an apparent impression that they are contradictory to each other. But this is only apparent. A close scrutiny will reveal that there is no real contradiction amongst the judgments at all. The synthesis of the views is quite clearly that the general rule is strict interpretation while special rule in the case of beneficial and promotional exemption is liberal interpretation. The two go very well with each other becaus ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... restrictions it must be held that the Notification merely requires that all the four conditions be fulfilled. If all four conditions are fulfilled, their benefit cannot be denied on the ground that certain percentage of production is from material purchased from outside. As in this case all four conditions are fulfilled, in our view, the Tribunal was right in holding that the benefit of the Notification was available." 15. The above decisions are binding precedent. Therefore, entitlement of exemption notification become self evident because it is the case of the Revenue that impugned goods are admittedly generated during the course of manufacturing of exempted Refind Edible Oil i.e. Rice Bran as unwanted by-products and have necessarily to be get rid of before the refined edible oil can finally come into being fit for human consumption can finally come into existence. 16. The learned Counsel fairly submitted that there are two conflicting decisions by the Tribuna's Division Benches on the same issue one by the Bangalore Bench in the case of CCE Hyderabad vs. Priyanka Refineries Lt. - 2010 (249) ELT 70 (Tri. Bang.) and another by the Delhi Bench in the case of CCE Jalandhar v. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Keshav Adke. We are bound to follow the earlier judgment which is precisely on the point in preference to the later judgment which has been rendered without adequate argument at the Bar and also without reference to the mandatory provisions of the Act." 20. It is well settled law that one additional or different fact may make a world of difference between conclusions in two cases. Therefore, in the case of A G Flats (supra) this Tribunal observed that the spent earth arising in course of refining of oil, being of no value, is not a new product or a by-product. Therefore, we are not considering the decision of A G Flats (supra) as the same is not sprit of the exemption notification on the basis of which exemption was denied. We, therefore, found that the arguments advanced in the instant case with support of authoritative pronouncement of Apex Court, statutory provisions and the material adduced herein were not available for consideration or not argued before earlier Benches. 21. As discussed above on the basis of various judicial pronouncements and the statutory provisions, and the vital additional submissions which are different from the earlier decisions we hold that the appe ..... X X X X Extracts X X X X X X X X Extracts X X X X
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