Government of India
Ministry of Finance, Department of Revenue
Central Board of Excise & Custom, New Delhi
Subject: CE- Eligibility of Cardenol for exemption under notification No. 115/75-CE dated 30.4.75 – Clarification regarding.
I am directed to say that doubts have been expressed as to whether Cardenol is a product of
Cashew Industry and accordingly entitled to the benefit of exemption from Central Excise duty under notification No. 115/75-CE dated 30.4.75.
2. During the cashew processing operations, the industry recovers Cashew nut Shell Liquid (CNSL) containing parts of cashew shells and certain other contamiants/ organic impurities. Some units take the cashewnut shell liquid and purify it by distillation. The purified CNSL is commercially known as “Cardenol”.Online GST Certification Course by TaxGuru & MSME- Click here to Join
3. The matter has been examined. The Board has taken note of the following facts:
(i) The process to obtain “Cardenol” from Cashew Nut Shell Liquid (CNSL) is necessarily one of purification and not “manufacture”.
(ii) On a reference from the office of DG (AE), Cochin Regional Unit, the Cashew Export Promotion Council of India vide their letter dated 20.12.1995 clarified that cardenol manufacturers are also enrolled as members of the Council and registered as Registered Exporters as cardenol is a product of Cashew Industry.
(iii) The Indian Institute of Chemical Technology, Hyderabed on the basis of chemical tests of samples of CNSL and Cardenol has opined that IR spectra of both the samples are super imposable which means there is no difference in the structure between the two.
(iv) The Chemical Examiner, Customs Laboratory, Madras has expressed the view that cardenol cannot be considered as vegetable fat polymerised by heat in vacuum or otherwise chemically modified.
(v) The Chief Chemist, CRCL, New Delhi has expressed the view that in view of the composition and derivation of Cardenol, there are grounds to consider this product manufactured in factories covered by “Cashew Industry”.
4. Therefore, the process to obtain “Cardenol” from CNSL is necessarily one of purification/ distillation and after distillation, the basic composition as well as the molecular structure of CNSL do not undergo any transformation. The Board has also take note of the judgements of ECGAT in the case of SD Fine Chem. Pvt. Ltd. [1991 (56) ELT 393 T] and Anil Chemicals Ltd. [1985 921) ELT 889] wherein it has been held that the process of purification by distillation does not amount to “manufacture” within the meaning of section 2(f) of the Central Excise Act, 1944. In view of the above it is felt that since CNSL is a product of “Cashew Industry”, Cardenol, which is a purified form of CNSL, would continue to be product of “Cashew Industry”.
5. Therefore, it is clarified that Cardenol is a product of “Cashew Industry” and accordingly exempt from Central duty in terms of notification No. 115/75-CE dated 30.4.75.
6. All pending disputes/ assessments on the issue may be settled in the light of these guidelines.