No Retro Exemption for Gums, Waxes, Soap Stocks and Fatty Acids produced during the course of manufacture of refined vegetable oil - CBEC
AS per Section 11C of the Central Excise Act, if the practice is or was that excise duty was not being levied on a particular product, the Government can direct that such duty need not be paid. This is a sort of retrospective benefit when goods are not exempted for a particular period. But the issue of a Section 11C notification is a complicated and time consuming affair.
In early 2012, the Board floated a survey to decide the issue of allowing the benefit of Section 11C exemption to by products like Gums, Waxes, Soap Stocks and Fatty Acids produced during the course of manufacture of refined vegetable oil, which is exempt.
The survey revealed that a majority of manufactures were paying duty on these by products. Thus a general practice of non-levy of central excise duty on these products is not established.
Further, the Supreme Court has dismissed the Civil Appeals (and also the review petitions) filed by the parties affected by the decision of the CESTAT in the case of CCE, Jalandhar v/s A.G. Fats Limited and others, where it was inter alia held that the by-products like Gums, Waxes, Soap Stocks and Fatty Acids have not been shown to be of no value or negligible value and hence, are not eligible for exemption as waste under notification no. 89/95-CE dated 18.05.1995.
So, the Board has rejected the request of the Solvent Extractors' Association of India for benefit of Section 11C and also its request for issue of an order under Section 37B of the Central Excise Act, 1944 declaring these byproducts as waste.
CBEC Letter in F. No. 103/03/2012-CX.3, Dated: January 03, 2014