Waste, Gums, Fatty Acids Arising During Manufacturing Of Vegetable Oils Are Eligible For Excise Duty Exemption: CESTAT

The Chandigarh Bench of Customs, Excise, and Service Tax Appellate Tribunal (CESTAT) has held that waste, gums, fatty acids, etc. arising during the course of the manufacture of vegetable oils are eligible for the excise duty exemption.

The bench of S. S. Garg (Judicial Member) and P. Anjani Kumar (Technical Member) has observed that waste, gums, fatty acids, etc. arising out of the manufacture of vegetable oils are waste and eligible for exemption under Notification No. 89/95.

As per Notification No. 89/95, the excise duty shall not be leviable subject to three conditions. Firstly, the goods should be “waste, paring, and scrap." Secondly, the goods should arise in the course of the manufacture of “exempted goods." Lastly, the exemption is not available to the unit that manufactures excisable goods other than “exempted goods.".

The appellant/assessee is a manufacturer of vegetable oils and has availed of Notification No. 89/95-CE dated September 18, 1995, on the fatty acids, acid oils, gum and sludge, waxes, spent earth, etc., arising during the manufacture of vegetable oils.

The department contended that the items manufactured do not qualify as waste in terms of the notification. The show-cause notices were issued for recovery of duty and penalty and were confirmed by the original and appellate authorities.

The tribunal held that the removal of unwanted materials resulting in products like gums, waxes, and fatty acids with odour cannot be called a process of manufacture of these gums, waxes, and fatty acids with odour.

Counsel For Appellant: G.S. Sandhe

Counsel For Respondent: Aneesh Dewan

Case Title: M/s Kissan Fats Limited Versus The Commissioner of Central Excise

Case No.: Excise Appeal No.55515 Of 2013

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