By TIOL News Service

MUMBAI, JUNE 04, 2016: THE issue is whether "malt extract" which arises during the course of manufacturing of Indian Made Foreign Liquor (IMFL), is liable to excise duty as it is allegedly an excisable commodity failing under Chapter 19 of the CETA, 1985.

Upon 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.

The SCN which sought to demand duty, by invoking the extended period, from the appellant was also based upon the ground that such malt extracted is a marketable commodity and was marketed by various companies during the relevant period.

The adjudicating authority confirmed the demand along with interest and penalties and, therefore, the appellant is before the CESTAT.

The appellant pointed out that identical issue has been settled by the Tribunal in the case of Mohan Rocky Spring water Breweries Ltd. &SKOL Breweries Ltd. – 2003-TIOL-169-CESTAT-MUM wherein the Tribunal held that the malt extract is WORT, which is not a marketable commodity, hence no duty demand can be raised.

The AR fairly agreed that the issue involved in the instant case and in the cited case are same.

The CESTAT, therefore, by following its earlier judgment held that the impugned order is unsustainable. The impugned order was set aside and the appeal was allowed.

In passing: Also see 2016-TIOL-101-CESTAT-MUM.

(See 2016-TIOL-1334-CESTAT-MUM)