Mobil oil obtained from the cleaning process is not a manufactured product and the central excise duty was not sustainable held by the Ahmedabad bench of Customs, Excise & Service Tax Appellate Tribunal (CESTAT).
Shri J.C Patel & Shri Rahul Gajera appeared for the Appellant and Shri Ghanshyam Soni appeared for the Respondent
The assessees, M/s. Alicid Organic Industries Ltd and Shri Manish C. Patel against Order-In-Original passed by the Commissioner, Central Excise, Ahmedabad.
The Appellant engaged in the Recycling/ refining of Waste Oils/ Sludge and procured sludge/waste oil from vessels arriving from major ports Kandla, Mundra and Ship Breaking yard, Bhavanagar and also from M/s GSPC, M/s Cairn Energy and M/s Focus Energy. Appellants carried out processes like vacuum distillation, filtration, heating and centrifuging and other processes to produce Re-usable Fuel Oil and Re-refined used oil.
The Appellant sold the fuel oil to traders and consumers in the open market as Recycled Fuel Oil /Re-Cycled Industrial Fuel Oil and Re-refined Lube Oil without payment of Central Excise Duty. Appellant’s processes amount to manufacture and the recycled fuel oil appeared to be classifiable under Central Excise Tariff Heading No. 27101990 and liable to discharge the Central Excise duty.
After due process of adjudication, the adjudicating authority vide impugned order dated 11-5-2017 confirmed the proposed demand and also imposed an equal penalty under Section 11AC of the Central Excise Act, 1944. He also imposed a penalty under Rule 25 of Central Excise Rules, 2002 and a penalty on Shri Manish C. Patel under Rule26 of Central Excise Rules, 2002.
It was observed that the processes did not amount to manufacture and no excise duty was payable and the Appellant has not suppressed anything from the department.
Judicial Member Mr Ramesh Nair and Technical Member Mr Raju held that “the demand of duty is not sustainable on merit as well as on limitation. Accordingly, the impugned order is set aside.” The appeals are allowed with consequential relief.
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