The Chennai Bench of the Customs, Excise and Service Tax Appellate Tribunal ( CESTAT ) quashed the denial of excise duty exemption on molasses captively consumed in rectified spirit and extra neutral alcohol ( ENA ).
The Order in Original are that the appellant is a manufacturer of ethyl alcohol – Rectified Spirit, Ethanol and Extra Neutral Alcohol, all non-excisable products, which same would be cleared for home consumption. Further, they also manufactured molasses in their sugar plant, which was captively used in their plant in the manufacture of, among other dutiable products, RS and ENA, in respect of which the appellant was availing the exemption under Notification No. 67/95 – CE dated 16.03.1995, as amended.
With effect from 01.03.2005, Rectified Spirit was omitted from the Heading to 2207 of the Schedule to the Central Excise Tariff Act 1985. It thus appeared to the Revenue that the Rectified Spirit was not an excisable goods and therefore, was not covered by the term ‘final product’ the exemption claimed in terms of the above Notification 67/95 in respect of molasses used in the production of rectified spirit appeared to be incorrect. That resulted in the issuance of a Show Cause Notice, proposing inter-alia the demand of duty.
The Advocate, MN Bharathi appearing for the appellant submitted, at the outset, that the issue is no more res integra as the same has been considered and settled in their favour in the appellant’s own case, for a different period, by this Chennai Bench of the CESTAT and also referred to various paragraphs of the said order, to butter his contentions.
M. Selvakumar, the Assistant Commissioner relied on the findings of the adjudicating authority.
A Two-Member comprising of M Ajit Kumar, Technical Member and P Dinesha, Judicial Member observed that “The only issue to be considered by us is, “whether the Revenue is justified in denying the benefit of exemption Notification No.67/95 dated 16.3.1995?” We agree with the contention of the Advocate that this Bench has considered almost identical issue, in their own case, to hold that the denial of exemption Notification No.67/95 was incorrect, for the reasons discussed therein, by also relying upon an earlier order of Chennai Bench in the case of Sri Ambika Sugars Ltd.”
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