In a major relief to M/s Kissan Fats Limited, the Chandigarh Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT), ruled that waste, gums, fatty acids etc arising on manufacture of vegetable oils are eligible for excise duty exemption.
The appellants are manufacturers of vegetable oils and have availed benefit of Notification No.89/95-CE dated 18.09.1995 on the fatty acids, acid oils, gum and sludge, waxes and spent earth etc., arising during the manufacture of vegetable oils.
The Department contended that the items manufactured do not qualify to be waste in terms of the said notification. In respect of Appeal Nos.E/61359/2018, E/61462/2018 and E/60671/2019, the availment of Notification No.10/1996 by the appellants has been disputed by the Department.
G.S. Sandhe, Counsel, who appeared for the appellant submitted that a plain reading of Notification No.89/95 will reveal that three conditions namely (i) the goods should be “Waste, Paring and Scrap” (ii) the goods should arise in the course of manufacture of “Exempted Goods” and (iii) the exemption is not available to the unit which manufactures excisable goods other than “Exempted Goods”.
It was further submitted that in respect of Appeal Nos. E/61359/2018, E/61462/2018 and E/60671/2019, the lower authorities, though, followed the decision in the case of Ricela Health Foods Ltd. (supra) wrongly denied the exemption, under Notification No.10/96-CE dated 23.07.1996, on the plastic/ tin containers manufactured and captively used.
The Counsel for the Revenue, Aneesh Dewan, submitted that the Larger Bench in the case of M/s Ricela Health Foods though referred to M/s A.P. Solvex did not give any finding with regards to the binding effect of the Apex Court’s judgment in the case of Marico Limited wherein M/s A.G.
A Two-Member Bench comprising SS Garg, Judicial Member and P Anjani Kumar, Technical Member observed that “Coming to the Department’s contention that the decision in the case of A.G. Fats, which was affirmed by the Supreme Court, was not discussed by the Larger Bench will not be of any avail as the decision in the case of M/s Marico Limited is the latest one and requires to be followed, therefore, by following the principles of judicial discipline, we are of the considered opinion that waste, gums, fatty acids etc. arising during the course of manufacture of vegetable oils are eligible for the exemption Notification No.89/95.”
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