Case Law Details
NSL Sugars Limited Vs Commissioner (CESTAT Bangalore)
CESTAT Bangalore held that benefit of notification no. 67/95-CE dated 16.03.1995 available in respect of molasses which is captively consumed for the manufacture of rectified spirit as rectified spirit is a dutiable excisable goods.
Facts- The appellants are engaged in the manufacture of sugar and in the course of manufacture of sugar, molasses emerges as a byproduct. Molasses is captively consumed in the manufacture of dutiable products like Ethyl Alcohol, Ethanol, denatured spirit and exempted products like rectified spirit etc. In the course of the manufacture of rectified spirit, carbon dioxide also emerges which is also liable to duty.
The appellants used to sell molasses on payment of duty as and when there is demand of those. However, for the molasses captively consumed, the appellants were availing the benefit of Notification No.67/95-CE dated 13.06.1995 as amended, which grants exemption from payment of duty on intermediary products, which are captively consumed in the manufacture of excisable goods. However, alleging that the appellant is manufacturing rectified spirit and Extra Neutral Alcohol by using molasses, which are exempted from payment of duty, thus the appellant is not eligible for the exemption in terms of the Notification No.67/95 dated 16.03.1995, proceedings were initiated. Thereafter Adjudicating Authority confirmed the allegations in the show cause notice vide the impugned order.
Conclusion- In Kothari Sugars & Chemicals Ltd. Vs. Comm. of C.Ex., Trichy it is held that the excisable goods are defined in the Central Excise Act, 1944 as goods specified in the tariff schedule as being subject to a duty of excise. Since undenatured ethyl alcohol is outside the purview of the central levy, it is not subject to a duty of excise under the Central Excise Act, 1944 and hence, not excisable. As a corollary, the same cannot be treated as either exempted goods or chargeable to nil rate of duty.
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