Products Generated During Rice Bran Oil Refining Treated as “Waste”, Exempt from Excise Duty: CESTAT [Read Order]

The Hyderabad Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) held that the products generated during the refining of rice bran oil, namely R.B. Fatty Acid, R.B. Wax, and R.B. Gums, were to be treated as “waste” and were exempt from excise duty under Notification No. 89/95 CE.

Godavari Edible Bran Oil Pvt Ltd,appellant-assessee,was engaged in manufacturing refined rice bran oil. In the process, R.B. Fatty Acid, R.B. Wax, and R.B. Gums were generated. The appellant treated these as waste and claimed exemption under Notification No. 89/95-CE dated 18.05.1995. The department treated them as by-products and denied the exemption. The demand was confirmed, and a penalty was imposed. On appeal, the penalty was set aside, but the demand was upheld.

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The assessee counsel argued that the issue was already settled by several decisions, including the Supreme Court’s ruling in Marico Ltd. [2022 (382) ELT 436 (SC)], which upheld the tribunal’s view. He also relied on judgments by various benches, including Ricela Health Foods Ltd., Kissan Fats Ltd., and a group of cases decided by the Hyderabad Bench in 2019. The departmental representative supported the findings of the Commissioner (Appeals).

The two member bench comprising Angad Prasad ( Judicial Member) and A.K.Jyotishi (Technical Member) considered submissions from both sides and reviewed the records. It noted that the issue was limited to whether the products generated during the refining of rice bran oil qualified as waste or by-products, and whether they were eligible for exemption under Notification No. 89/95-CE dated 18.05.1995.

Based on earlier decisions, the appellate tribunal found that such products had been treated as waste and were eligible for the exemption. It, therefore, held that the order passed by the Commissioner (Appeals) was not justified and accordingly set it aside.

Therefore the appeal was allowed.

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