TMI Blog2016 (2) TMI 283X X X X Extracts X X X X X X X X Extracts X X X X ..... tended by the learned Departmental Representative. There is nothing on record to indicate that these items, which were sought to be considered as distinct product, were being manufactured in the appellant's factory premises. Secondly, as find, arising out of the very same audit objection, another show cause notice was issued demanding duty on the used/waste MEG/TEG that arises during the course of manufacture in the factory premises of the appellant and the said demand was set aside by the first appellate authority; Revenue's appeal before the Tribunal [2008 (7) TMI 677 - CESTAT, MUMBAI], was rejected by an order dated 23/07/2008 (wherein I was one of the Member) holding that these items (used MEG) is not a manufactured product for demand of duty. In the case in hand, undoubtedly there is nothing on record to show that these products, which arise during the process of manufacture, are manufactured products. - Decided in favour of assessee - Appeal Nos. E/1800 & 2059/2010 - - - Dated:- 29-10-2015 - M V Ravindran, Member (J) For the Appellant : Ms Padmavati Patil, Adv For the Respondent : Shri N N Prabhudesai, Superintendent ( AR ) ORDER Per M V Ravindran ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ened on them. She would submit that the Tribunal, by an order No. A/697-698/08 dated 23/07/2008 - dismissed the appeal filed by Revenue. She would also draw my attention to the fact that there is no contention of revenue that these items are not scrap as show cause notice itself indicate the entire items as scrap. She would rely upon the following judgments for the proposition that waste/scrap even if they are marketable, are not liable to duty unless they are manufactured. (i) Grasim Industries ltd. vs. Union of India 2011 (273) ELT 10 (SC) (ii) Commissioner of Central Excise Customs vs. Dhakad Metals Pvt. Ltd. 2010 (257) ELT 535 (Guj) (iii) Union of India vs DSCL Sugar Ltd. - 2015-TIOL-240-SC-CX 6. The learned Departmental Representative, on the other hand would draw my attention to the annexure to the show cause notice wherein the list of items on which duty liability has been worked out and submits that the goods which were cleared were containing cellulose and these products arise during the course of manufacture of the final products arise during the course of manufacture of the final product by the appellant-assessee. He would also draw my attention th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ority; Revenue's appeal before the Tribunal in appeal No. E/1523/2003, was rejected by an order dated 23/07/2008 (wherein I was one of the Member) holding that these items (used MEG) is not a manufactured product for demand of duty. In the case in hand, undoubtedly there is nothing on record to show that these products, which arise during the process of manufacture, are manufactured products. I find strong force in the contention raised by the learned counsel that the issue seems to be covered by the judgment of the Hon'ble apex Court in the case of Grasim Industries Ltd. (supra) wherein, in paragraph 8 of the judgment the issue has been laid down. With respect, the same is reproduced: 8. The goods have to satisfy the test of being produced or manufactured in India. It is settled law that excise duty is a duty levied on manufacture of goods. Unless goods are manufactured in India, they cannot be subjected to payment of excise duty. Simply because a particular item is mentioned in the First Schedule, it cannot become exigible to excise duty. [See Hyderabad Industries Ltd. v. Union of India, (1995) 5 SC 338, Moti Laminates (P) Ltd. v. CCE, (1995) 3 SCC 23, CCE v. Wimco Ltd ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nc sulphate (Agricultural Grade) can be said to be a waste or not. Further, can it be said that it is a process of an article, and therefore, such Copper Sludge is a different article and not a waste. The process of manufacture admittedly is of zinc sulphate (Agricultural Grade) and it is not even the department's case that the ultimate aim of manufacture was manufacturing the Copper Sludge, but the manufacture was that of zinc sulphate (Agricultural Grade). It is in the process of such manufacture of zinc sulphate (Agricultural Grade) that the waste like Copper Sludge (Agricultural Grade) would arise and therefore the submissions made by learned counsel Mr. Oza on the aspect of manufacture or the process cannot be accepted especially when during the process of manufacture of Zinc Sulphate (Agricultural Grade) the Copper Sludge has emerged, which is not excisable article. Therefore, the submissions made by learned counsel Mr. R.J. Oza cannot be accepted. 9. Revenue was aggrieved by such an order of the Hon'ble High Court and filed a Special Leave Petition before the Hon'ble Apex Court and the same was dismissed as reported at 2010 (257) ELT A139(SC). 10. Recent ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n the present case it could not be pointed out as to whether any process in respect of Bagasse has been specified either in the Section or in the Chapter notice. In the absence thereof this deeming provision cannot be attracted. Otherwise, it is not in dispute that Bagasse is only an agricultural waste and residue, which itself is not the result of any process. Therefore, it cannot be treated a falling within the definition of Section 2(f) of the Act and the absence of manufacture, there cannot be any excise duty. 11. As regards the case law relied upon by the learned Departmental Representative, I find that the apex Court judgment in the case of Grasim Industries Ltd. (supra) has laid down the 'distinct factor'. The 'distinct factor' as has been laid down by the apex Court is applicable in the case in hand. The distinct factor has been recorded by the apex Court in the case of Grasim Industries Ltd. (supra) in paragraph 15. The ratio of Bharat Petroleum Corporation Ltd. (supra) there was a subsidiary product which is distinct and have commercial identity whereas, in the case in hand, it is not. 12. In view of the foregoing, I find that the impugned order i ..... X X X X Extracts X X X X X X X X Extracts X X X X
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