TMI Blog2022 (4) TMI 363X X X X Extracts X X X X X X X X Extracts X X X X ..... der Central Excise Act. This Act is a central legislation enacted pursuant to the legislative power conferred on the Parliament in terms of Article 246 read with Entry 84 of List-I of the Seventh Schedule to the Constitution during the relevant Entry No.84 - perusal makes it ample clear that alcoholic liquors for human consumption as that of Beer are out of the scope of Central Excise Act. Though the goods which are specified in First and Second Schedule to Central Excise Tariff Act, 1985 only are excisable goods: But alcoholic liquors including Beer find no mention in the said Schedules of Central Excise Tariff Act, 1985 because of the above Entry No.84. There is no denial that such alcoholic liquors are subject to Excise Duty under State Excise Law. Since the manufactured good in question is Beer, an alcoholic liquor for human consumption, the manufacturing process is out of the purview of Central Excise Act. Question of any intermediate product arising during such manufacturing process, irrespective find mentioned under Central Excise Tariff, cannot be made liable for Excise Duty under Central Excise Act. Whether the Carbon Dioxide (CO2) evolved herein confirms the double ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aside. Appeal allowed - decided in favor of appellant. - Excise Appeal No. 51068 of 2021 [SM] - FINAL ORDER No. 50316/2022 - Dated:- 5-4-2022 - MRS. Dr. RACHNA GUPTA, MEMBER (JUDICIAL) Mr. Sachin Agarwal Ms. Richa Bhandari, Advocates for the Appellant Mr. Mahesh Bhardwaj, Authorised Representative for the Respondent ORDER The present appeal has been filed to assail the Order-in-Appeal No.03-04/2021 dated 15.01.2021. The facts in brief are as follows that: M/s SAB Miller India Private Limited (presently known as Anheuser Busch InBev India Limited), the appellant, are engaged in manufacture of Beer which is alleged as non-excisable being not covered under First Schedule to the Central Excise Tariff Act, 1985. During the process of manufacture of Beer, a gas namely Carbon Dioxide (CO2) is generated falling under Tariff Sub Heading No.28112190 of the First Schedule to Central Excise Tariff Act, 1985. The Department observed that the appellant has captively consumed 5546095 Kgs and 729055 Kgs of Carbon Dioxide valued at ₹ 2,52,11,407/- and ₹ 32,85,619/- during the period from March, 2010 to December 2014 and from January 2015 to June 2015 resp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the appellant in State of Andhra Pradesh and Kerala and Writ Petitions were filed before the respective High Courts. Hon ble High Court of Kerala vide Order dated 02.02.2015 had granted Stay directing the Commissionerate to not to further proceed. The said Stay had been extended finally vide Order dated 02.04.2019. The Kerala High Court has held that irrespective of Carbon Dioxide may be an independent product mentioned under Central Excise Tariff but in the present case, it is a product that arises in a manufacturing process that does not attract the levy of Central Excise Duty under Central Excise Act. It is submitted that the confirmation of demand is highly unsustainable, impugned order accordingly is prayed to be set aside and the appeal is prayed to be allowed. 5. To rebut these submissions, it is submitted that Rule 9 of Central Excise Rules make an excisable intermediate good, even when used for captive consumption, liable to duty. It is further submitted that the duty would have been exempted on CO2 in terms of Notification No.67/1995 dated 16.03.1995 but since the CO2 is captively consumed for production of such final product which is not an excisable good, the exe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... llant thereby confirming the demand as was proposed under the aforesaid two show cause notices. 8. The above discussed facts make it ample clear that appellant is manufacturing an alcoholic drink i.e. Beer which is not excisable under Central Excise Act but is excisable under Rajasthan State Excise Act. The show cause notices have been issued under Central Excise Act. This Act is a central legislation enacted pursuant to the legislative power conferred on the Parliament in terms of Article 246 read with Entry 84 of List-I of the Seventh Schedule to the Constitution during the relevant Entry No.84 read as follows: 84. Duties of excise on tobacco and other goods manufacture or produced in India except (a) alcoholic liquors for human consumption and (b) opium, Indian hemp and other narcotic drugs and narcotics. 9. The perusal makes it ample clear that alcoholic liquors for human consumption as that of Beer are out of the scope of Central Excise Act. Though the goods which are specified in First and Second Schedule to Central Excise Tariff Act, 1985 only are excisable goods: But alcoholic liquors including Beer find no mention in the said Schedules of Central Excise Tariff ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rein Dross and Skimming obtained in the process of manufacture of aluminium sheets from aluminium ingots was denied to be the result of treatment, labour or manipulation hence was held non-excisable. Otherwise also, despite the directions of remand vide Order-in-Appeal dated 19.06.2018 the physical verification of plant was not conducted. Department has failed to produce on record any evidence that a separate process has been carried out on CO2 as generated before it was captively consumed by the appellant as was also directed while remanding vide the aforesaid order. As already observed above, no separate treatment is given to wort mixture for emission of CO2 which is inevitable consequence of fermentation of said wort mixture into Beer that CO2 in the present facts and circumstances cannot be held to have been manufactured product which is excisable. In the present case, CO2 has emerged in the manufacturing process of such product to which Central Excise Act does not apply. For this reason also Excise Duty cannot be levied upon so emitted CO2 irrespective it has been captively used in further process for manufacturing the impugned alcoholic liquor. 11. Coming to the seco ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing process that does not attract the levy of Central Excise Duty under Central Excise Act question of imposing demand and confirmation of duty on Carbon Dioxide in given circumstances is highly unsustainable. The captive consumption of such CO2 was only to efficiently manufacture the non-excisable Beer/the final product. The orders confirming duty on the quantity of CO2 being captively used by the appellant is therefore liable to be set aside. 13. It is observed that an earlier show cause notice dated 5th August, 2014 being issued to the appellant themselves for the period July 2009 to January 2014 (which includes period involved in the present case also) has already been challenged before the Hon ble High Court of Kerala at Ernakulum in Writ Petition Civil No.3123/2015 vide the Order dated 2nd April, 2019, the said show cause notice has already been held to have been issued on erroneous premise and without jurisdiction. I do not find any such fact which may differentiate the present show cause notices from the said show cause notice rather these are found to be squarely covered by the said decision. In light thereof and in view of entire above discussion the findings under cha ..... X X X X Extracts X X X X X X X X Extracts X X X X
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