Waste mud (spent earth) emerging involuntarily during the bleaching of crude palm oil is not an excisable good, especially following the withdrawal of CBIC Circular No. 904/24/09-CX and the application of Notification No. 89/1995-CE.

FINAL ORDER No. A/ 30257/ 2026

[Order per: A.K. JYOTISHI]

M/s 3F Industries Ltd (hereinafter referred to as the appellant) are in appeal against the OIA dt.22.04.2014 (Impugned Order), whereby, the appeal filed by the appellant against the OIO dt.30.09.2013 was rejected.

2. The brief facts of the case are that the appellants are engaged in manufacture of Fatty Acids and Fatty acid pitch, etc. The department noticed that during the manufacture of refined oils, ‘waste mud’ is emerging after the process of bleaching of crude palm oil is done. The said waste mud was considered as excisable good classifiable under Tariff 1522 0090 and since the appellant had not discharged any Central Excise duty on the said good, a SCN was issued demanding duty. On adjudication, considering the submissions made by the appellant, the adjudicating authority took into account Board Circular No. 904/24/09-CX dt.28.10.2009 and also the fact that as per Notes under Chapter 15, bleaching amounts to manufacture and held that spent earth emerging during the course of bleaching of crude palm oil qualifies the test of manufacture too as the said product has marketability.

3. Learned Advocate for the appellant has mainly submitted that on this issue in their own case, pertaining to the same period, the Tribunal has dropped the demand allowing the appeal filed by them vide Final Order No. A/30012/2026 dt.09.01.2026. In addition, he has also submitted that spent earth is a waste material emerging unavoidably by using bleaching earth in the process of refining of crude vegetable oils and therefore, it cannot be treated as manufactured excisable good.

4. Learned AR, on the other hand, has reiterated the findings of the Commissioner (Appeals) in the impugned order.

5. Heard both sides and perused the records.

6. The short question for determination is whether waste mud is an excisable good and therefore, liable to Central Excise duty or otherwise, keeping in view the amendments in the statutory provisions defining ‘excisable goods’ in clause (d) of section 2 of Central Excise Act, 1944 in the Budget of 2008. We find that this issue in respect of same appellant was examined and this Tribunal, after considering various judgments, inter alia, allowed the appeal. The relevant paras of said order, cited supra, are reproduced below for better appreciation of reasons for allowing the appeal.

“2. Learned Advocate has submitted that the issue is no longer res integra in view that demand has been confirmed relying on circular dt.28.10.2009, which was quashed by the Hon’ble High Court of Allahabad in the case of Balrampur Chini Mills Ltd Vs UOI [2014 (300) ELT 373 (All)] and subsequent thereto, the said circular itself was withdrawn by the CBIC after the decision of Hon’ble Supreme Court in the case of DSCL Sugars Ltd., vide Circular No. 1027/15/2016-CX dt.25.04.2016. Moreover, relying on the said circular, the Tribunals have also dropped similar demands in case of other units. He has relied on certain judgments, as under.

a) CCE, Hyd-III Vs Divis Lab [2017 (347) ELT 275 (Tri-Hyd)]

b) M/s Gemini Edibles & Fats India Pvt Ltd Vs CCE & ST, Guntur [2016 (6) TMI 990 – CESTAT Hyd]

c) CCE, Chandigarh-I Vs Marico Ltd [2022 (382) ELT 436 (SC)]

d) Ricela Health Foods Ltd Vs CCE, Chandigarh [2018 (361) ELT 1049 (Tri-LB)]

e) Arihant Solvex Pvt Ltd Vs CCE, Jaipur-I [2015 (316) ELT 290 (Tri-Del)]

f) Commissioner Vs Markfed Vanaspati & Allied Industries [2002 (145) ELT A250 (SC)]

3. He has also taken an alternative plea that spent fuller e