AMRIT BANASPATI CO. LTD. Vs. CCE, CHANDIGARH

JUDGEMENT

(1.) Appellants are engaged in the manufacture of Vanaspati falling under Chapter 15 of the Schedule to Central Excise Tariff Act, 1985. They were issued with a Show -cause -notice dated 30.11.98 demanding differential duty of Rs.72,27,073.20 as duty on soap stock manufactured by them, during the period between 23.7.96 to 28.2.97. Action for violation of various Provisions of the rules were also contemplated in the show -cause -notice. Appellant raised a contention that during the period mentioned in the Show -cause -notice they did not manufacture or sell any soap stock. They manufactured and sold only Acid Oil. At the intermediate stage of its manufacture soapy water came into existence and the soap water is not marketable commodity. Earlier they manufactured soap stock with concentration varying from 15.98% to 33.16% and those sales were covered by 11 Invoices which were submitted to the Department. There after the alleged intermediate product of soap stock was not manufactured and sold. The demand made in the show -cause -notice in untenable.

(2.) After considering the entire evidence adduced by the parties, the Commissioner by Order -in -Original No.64/CE/99 dated 28.4.2000 confirmed that demand made in the show -cause -notice. He also imposed a penalty of like sum invoking the Provisions contained in Section 11AC of the Central Excise Act. Interest at the rate of 20% on the amount of duty with effect from 28.9.96 was also levied under Section 11AB of the Central Excise Act. This order of the Commissioner is under challenge.

(3.) At page 56 of the appeal paper the "process Flow Sheet" is made available by the manufacturer (For a proper understanding of the process, 'Process Flow Sheet' is annexed to this order). It shows that Soapy matter with concentration of fatty substance upto 5% is the waste obtained while oil is manufactured. That soapy matter of the above concentration of fatty substance is subjected to process which lead to Acid Oil. Acid Oil is a marketable commodity. The Acid Oil so obtained by the appellant was sold. But at the relevant time the Acid Oil was exempt from duty. Learned Counsel representing the appellant submitted before us that Acid Oil now manufactured are being sold and duty on that is being paid in accordance with the Act and the Rules.