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Clarification regarding eligibility of Cardenol for exemption under
notification No. 115/75-CE dated 30.4.75
Circular
No. 281 dated 26th December 1996
I
am directed to say that doubts have been expressed as to whether Cardenol is a
product of Cashew Industry and accordingly entitled to the benefit of exemption
from Central Excise duty under notification No. 115/75-CE dated 30.4.75.
2.
During the cashew processing operations, the industry recovers Cashew nut
Shell Liquid (CNSL) containing parts of cashew shells and certain other
contaminants/ organic impurities. Some units take the cashew nut shell liquid
and purify it by distillation. The purified CNSL is commercially known as "Cardenol".
3.
The matter has been examined. The Board has taken note of the following
facts:
(i)
The process to obtain 'Cardenol' from Cashew Nut Shell Liquid (CNSL) is
necessarily one of purification and not
'manufacture'.
(ii)
On a reference from the office of DG (AE), Cochin Regional Unit, the
Cashew Export Promotion Council of India vide their letter dated 20.12.1995
clarified that Cardenol manufacturers are also enrolled as members of the
Council and registered as Registered Exporters as Cardenol is a product of
Cashew Industry.
(iii)
The Indian Institute of Chemical Technology, Hyderabad on the basis of
chemical tests of samples of CNSL and Cardenol has opined that IR spectra of
both the samples are super imposable which means there is no difference in the
structure between the two.
(iv)
The Chemical Examiner, Customs Laboratory, Madras has expressed the view
that Cardenol cannot be considered as vegetable fat polymerised by heat in
vacuum or otherwise chemically modified.
(v)
The Chief Chemist, CRCL, New Delhi has expressed the view that in view of
the composition and derivation of Cardenol, there are grounds to consider this
product manufactured in factories covered by 'Cashew Industry'.
4.
Therefore, the process to obtain 'Cardenol' from CNSL is necessarily one
of purification/ distillation and after distillation, the basic composition as
well as the molecular structure of CNSL do not undergo any transformation. The
Board has also take note of the judgements of ECGAT in the case of SD Fine Chem.
Pvt. Ltd. [1991 (56) ELT 393 T] and Anil Chemicals Ltd. [1985 921) ELT 889]
wherein it has been held that the process of purification by distillation does
not amount to 'manufacture' within the meaning of section 2 (f) of the Central
Excise Act, 1944. In view of the above it is felt that since CNSL is a product
of 'Cashew Industry', Cardenol, which is a purified form of CNSL, would continue
to be product of 'Cashew Industry'.
5.
Therefore, it is clarified that Cardenol is a product of 'Cashew
Industry' and accordingly exempt from Central duty in terms of notification No.
115/75-CE dated 30.4.75.
6.
All pending disputes/ assessments on the issue may be settled in the
light of these guidelines.
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