TMI Blog2018 (8) TMI 1167X X X X Extracts X X X X X X X X Extracts X X X X ..... as excisable goods and denied benefit of Notification No.89/95-CE. Soap Stock - Acid Oil - Held that:- Soap Stock is consciously again processed by the appellants which results in emergence of Acid Oil and Soap Sludge. It then cannot be said that emergence of acid oil is an unintended by product - the acid oil is an intended final product resulting out of conscious process of soap stock. The said acid oil would then have to be considered as a new product with a different name, character and use, and exigible to excise duty as applicable - duty liability upheld - The manner of calculation of duty liability arrived at in the Annexure to the SCN will then have to be reworked to restrict the assessed liability with interest as applicable, o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... facturers without payment of duty. According to department, soap stock was classifiable under Central Excise Tariff Heading 15220020 and the residue soap sludge under CETH 15220090 and acid oil under CETH 38231900. Department took the view that Excise duty was required to be discharged by the appellants on acid oil and soap sludge. Accordingly, a show cause notice dt. 25.11.2010 was issued to the appellants, inter alia proposing demand of Central Excise duty of ₹ 23,81,941/- with interest and also imposition of penalty under Section 11AC of the Act. After due process of adjudication, the original authority vide an order dt. 27.05.2011 confirmed the proposed demand and also imposed equal penalty under Section 11AC of the Central Excise ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o the Larger Bench of Tribunal. Only on the bonafide belief that duty exemption under Notification No.89/95-CE was very much available, the appellant had cleared the goods without payment of duty. v) Since the issue is one of interpretation the allegation of intention to evade duty is not sustainable. vi) They placed reliance upon the ratio of the following case law : (1) Steelcast Ltd. Vs CCE Bhavnagar 2009 (14) STR 129 (Tri.-Ahmd.) (2) CCE Pune Vs Core Fitness (P) Ltd. 2017 (4) GSTL 80 (Tri.-Mumbai) (3) Padmini Products Vs CCE 1989 (43) ELT 195 (SC) (4) CC Vs Cochin Minerals Rutiles Ltd. 2010 (259) ELT 182 (Ker.) 3. On the other hand, Ld. A.R Shri K. Veerabhadra Reddy supports the impugned order. He draws ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd fatty acid with odour cannot be called as a process of manufacture of such items. The process of manufacture is for refined rice bran oil; As such the incidental products are nothing but waste arising during course of refining of rice bran oil and applying the ratio of Apex Court, this cannot be considered as manufactured excisable goods. The said goods cannot be considered as anything other than waste and as such will be covered by the Exemption Notification No.89/95-CE. 5.2 We note that the ratio of Ricela Health Foods Ltd. (supra) has been followed by CESTAT Chennai in Sri Devi Oil Pvt.Ltd. Vs CCE Salem 2018 (5) TMI 1117- CESTAT Chennai and SSD Oil Mills Company Ltd. Anr. Vs CCE Chennai [Final Order No.41293-41296/2018 dt. 23.0 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Health Foods Ltd. (supra) and others would squarely apply with regard to soap stock‛, hence it cannot be held as excisable goods and denied benefit of Notification No.89/95-CE. However, as per the facts on record, Soap Stock is then consciously again processed by the appellants which results in emergence of Acid Oil and Soap Sludge. It then cannot be said that emergence of acid oil is an unintended by product. 5.5 Viewed in this context, the acid oil is an intended final product resulting out of conscious process of soap stock. The said acid oil would then have to be considered as a new product with a different name, character and use, and exigible to excise duty as applicable. To this extent, we find no infirmity in the upholdin ..... X X X X Extracts X X X X X X X X Extracts X X X X
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