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2017 (4) TMI 799 - CESTAT MUMBAI

2017 (4) TMI 799 - CESTAT MUMBAI - TMI - Manufacture - purification of the mixed solvents - whether the mixture of solvents, which is sold by the appellant, is excisable products or not for the period prior and post 15.6.2008? - Held that: - the solvents are repeatedly used after purification within the factory premises and they get mixed up with various impurities and at a stage when they cannot be reused, they are cleared by the assessee for a consideration. In short, clearances of the mixed s .....

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& 85851/14-Mum - A/86511-86519/17/EB - Dated:- 29-3-2017 - Mr. M. V. Ravindran, Member (Judicial) And Mr. Devender Singh, Member (Technical) Shri Gajendra Jain, Advocate, for appellant Shri Ashutosh Nath, Assistant Commissioner (AR), for respondent ORDER Per M.V. Ravindran All these appeals are disposed of by a common order as the issue involved is the same and in respect of the very same assessee for different periods. 2. Appeal No. E/85851/14 of the very same assessee and on the same issue was .....

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ydrofuron, dimethyl formamide, acetonitrile etc. and also procures the same indigenously without payment of duty. The solvents are used by the appellant for undertaking a chemical process and at the end of the process, the said solvents come out as an admixture of solvents in impure form. The admixture of the solvents is purified by the appellant and cleared in the market as mixture of solvents. During the period September 2006 to December 2012, the appellant cleared this mixture of solvent with .....

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e also imposed. 4. Learned counsel appearing on behalf of the appellant draws our attention to the show cause notice and the impugned orders. He would submit that the show cause notice issued to the appellant for the demand of duty was on two counts that the appellant has imported and procured indigenously all the solvents without payment of duty; having cleared mixture of solvents without payment of duty, duty forgone needs to be demanded and that the said mixture of solvents cleared by the app .....

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admixture of solvents, which is purified and cleared by the appellant, is amounting to manufacture as per the provisions of Section 2(f) of the Central Excise Act, 1944 read with Chapter Note 1 to Chapter 29. He would submit that the question of these goods being manufactured does not arise at all as identical issue came up before this Tribunal in the case of CCE, Hyderabad vs. Aurobindo Pharma Ltd. reported in 2010 (249) ELT 415, wherein the same issue of spent solvents was considered and held .....

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n of Aurobindo Pharma Ltd, it was held in favour of the assessee. He would also rely upon the judgment of the apex court in the case of UOI vs. DSCL Sugar Ltd. reported in 2015 (322) ELT 769 (SC) for the proposition that post 10.5.2008, the provisions of Section 2(d) of the Central Excise Act, 1944 may also not apply as the Hon ble Supreme Court has clearly laid down the law as to when the provisions of Section 2(d) will be attracted. 5. Learned departmental representative, on the other hand, wo .....

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ame of mixture of solvent which has undertaken certain purification process. It is his submission that the lower authorities called for the various documents like copies of the delivery challans, invoice, test report etc. and recorded statements of Manager Accounts on the issue. It is his submission that the said Manager Accounts in his statement dated 4.8.2007 has stated that they were paying central excise duty on such spent solvent/mixture of solvent upto September 2006 and subsequently after .....

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89 for the proposition that by-product which emerges during the process of manufacture of another product has to be considered as having emerged as a result of process of manufacture. He would also rely upon the judgment of the apex court in the case of CCE, Ahmedabad vs. Nirma Chemical Works Ltd. reported in 2002 (146) ELT 485 (SC) for the same proposition. He would submit that the various other submissions made by the appellant in the grounds of appeal as to cum duty benefit needs to be extend .....

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. The issue needs to be decided in the case in hand is whether the mixture of solvents, which is sold by the appellant, is excisable products or not for the period prior and post 15.6.2008. It is undisputed that the mixture of solvents, which is cleared by the appellant, is mixture solvents obtained after considerable reuse, which cannot be reused by the appellant in their factory premises and the said solvents are cleared on the invoices from the factory premises of the appellant. It is also un .....

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is also not disputed by the Revenue in the impugned orders that the solvents are repeatedly used after purification within the factory premises and they get mixed up with various impurities and at a stage when they cannot be reused, they are cleared by the assessee for a consideration. In short, clearances of the mixed solvent, which is done from the factory premises, is the residue, which gets retained after the manufacturing of final products by repeated use of the solvents during the course .....

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in the manufacture of the said products and availing Modvat Credit on the above said inputs/solvents. In the manufacturing process of the said finished goods, solvents such as Methanol, Toluene etc., are recovered and the same are re-used in the subsequent batches for four to five times till they become non-usable in the process. Then the assesses are clearing the recovered/distilled/spent solvents which contain 80 to 90% of Methanol, Toluene etc., by declaring them as industrial waste solvents .....

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learned Commissioner (Appeals) reliance upon the decided case-laws of the very same Bench to hold in favour of respondent seems to be correct. We also note that the learned Commissioner (Appeals) has followed the judgment given by the Tribunal. From the above reproduced paragraphs, it can be seen that the issue involved in the case in hand and in the case of Aurobindo Pharma Ltd. is the same. At least upto 10.5.2008, the question of excisability of the mixed solvent that arises during the course .....

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to be addressed now. The said provisions of Section 2(d) defines excisable goods and states that for the purposes of this sub-section, goods includes any article, material or substance which is capable of being bought and sold for a consideration and such goods shall be deemed to be marketable. In the cases in hand, from Appeal No.86521 to 86526/13, 85825/14 and 85851/14, the period involved is post 10.5.2008. Even with the enactment of provisions of Section 2(d) of the Central Excise Act, 1944, .....

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and followed in the case of Lee Pharma Pvt. Ltd. (supra), the question of demanding any duty from the appellant on this invocation of the provisions of Section 2(f) does not arise. 10. Be that as it may, the apex court was considering the provisions of Section 2(d) of the Central Excise Act read with Section 2(f) of the Central Excise Act in the case of DSCL Sugar Ltd. (supra). The ratio of the said judgment would apply in the case in hand squarely. We respectfully reproduce the relevant paragra .....

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se writ petitions holding that Bagasse being a waste and not a manufactured product, no duty is payable thereupon. For arriving at this conclusion, the High Court also have relied upon the judgment of this Court in Balrampur Chini Mills Ltd. in C.A. No.2791 of 2005 decided on 21-7-2010 [2015 (320) E.L.T. A258 (S.C.)]. 6. The aforesaid judgment was pronounced by this Court related to the period before 2008. In the year 2008 there was an amendment in Section 2(d) as well as in Section 2(f) of the .....

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d such goods shall be deemed to be marketable. 7. As per the aforesaid explanation, "goods" would now include any article, material or substance capable of being bought or sold for consideration and as such goods shall be deemed to be marketable. Thus, it introduce the deeming fiction by which certain kind of goods are treated as marketable and thus excisable. 8. However, before the aforesaid fiction is to be applied, it is necessary that the process should fall within the definition o .....

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in the Third Schedule, involves packing or repacking of such goods in a unit container or labelling or re-labelling of containers including the declaration or alteration of retail sale price on it or adoption of any other treatment on the goods to render the product marketable to the consumer; and the word "manufacture" shall be construed accordingly and shall include not only a person who employs hired labour in the production or manufacture of excisable goods, but also any person wh .....

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