Whether the malt extract which arises during the manufacturing of IMFL, is liable to excise duty?

PJ/CASE LAW/2016-17/3180

Case-M/s UNITED SPIRITS LTD Vs COMMISSIONER OF CENTRAL EXCISE, AURANGABAD

Citation-2016-TIOL-1334-CESTAT-MUM

Brief Facts-This appeal is directed against Order-in-Original No. 14/CEX/COMMR/2015 dated 30.4.2015 passed by the Commissioner of Central Excise & Service Tax, Aurangabad. Heard both sides and perused the records.
The issue involved in this case is whether the malt extract which arises during the course of manufacturing of Indian Made Foreign Liquor (IMFL), is liable to duty as it is an excisable commodity failing under Chapter 19 of the Central Excise Tariff Act, 1985.
After detailed investigation, it was noticed by the lower authorities that the appellant being manufacturer of IMFL is doing so by processing Malt, which is a major raw material; malt is germinated with cereal grain and it is soaked in water and then halted from germinating further by drying with hot air. Statements of various persons were recorded. The show-cause notice which sought to demand duty from the appellant was based upon also one of the grounds that such malt extracted is a marketable commodity and was marketed by various companies during the relevant period. The said show-cause notice was contested by the appellant on merits as well as on limitation. The adjudicating authority did not agree with the contentions raised and confirmed the demand along with interest and also imposed penalties.

Appelants Contention-Learned Counsel correctly points out that identical issue has been settled by the Tribunal in the case of Mohan Rocky Springwater Breweries Ltd. & SKOL Breweries Ltd.– 2003 (158) ELT 171 (Tri-Mum)= 2003-TIOL-169-CESTAT-MUMand produces a copy of the judgment as also in the department's appeal as in Appeal No. E/3244/2001 which was disposed of vide Order No. A/192-193/2010 dated 15.6.2010, wherein relying upon the judgment of Mohan Rocky Springwater & SKOL Breweries (supra), the Tribunal held that the malt extract are WORT, which is not an marketable commodity, hence no duty demand can be raised.

Respondents Contention-Learned AR appearing for the Revenue fairly submits that the issues involved in the instant case and in the case of Mohan Rocky Springwater & SKOL Breweries (supra) are same.

Reasoning Of Judgement-Since the issue involved is same, tribunal respectfully following their own judgment, hold that the impugned order is unsustainable and liable to be set aside and they do so. The appeal is accordingly allowed.

Decision-Appeal allowed

Comment-The gist of the case is that since the Malt Extract, arises during the course of manufacturing of Indian Made Foreign Liquor (IMFL), is WORT, which is not a marketable commodity, hence no Central Excise Duty can be demanded on the same and the Order is hereby set aside and appeal allowed. This is based on the remarkable judgment in the case of Mohan Rocky Spring water Breweries Ltd. & SKOL Breweries Ltd.

Prepared By-Neelam Jain

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PJ/CASE LAW/2016-17/3180

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