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of <h1>Tribunal rules no duty credit reversal for waste products in manufacturing</h1> <h3>NAVABHARAT VENTURES LTD. Versus COMMISSIONER OF C. EX., VISAKHAPATNAM</h3> NAVABHARAT VENTURES LTD. Versus COMMISSIONER OF C. EX., VISAKHAPATNAM - 2009 (235) E.L.T. 873 (Tri. - Bang.) Issues:Manufacture of Bio-earth/Bio-compost using spent wash, Demand of 8% on sale price, Applicability of Rule 6 of Cenvat Credit Rules, 2004, Interpretation of by-product and waste product, Legal precedent on usage of waste products in manufacturing exempted goods.Analysis:The appeal was filed against the Order-in-Appeal passed by the Commissioner of Central Excise, Customs & Service Tax, Visakhapatnam. The appellants, manufacturers of sugar and ethyl alcohol, were availing Cenvat credit on duty paid inputs used in their final products. The dispute arose regarding the manufacture of Bio-earth/Bio-compost using spent wash, which contains residual water from the manufacture of Rectified spirit. The Revenue demanded 8% of the sale price of the Bio-earth/Bio-compost under Rule 6. The appellants challenged this demand, arguing that the spent wash was a waste product and not subject to duty credit reversal. The Commissioner (Appeals) upheld the demand based on a previous decision, leading the appellants to appeal to the Tribunal.The Tribunal analyzed the case, considering the usage of spent wash in manufacturing Bio-earth/Bio-compost. The Tribunal noted that the credit reversed on molasses used in Rectified spirit production covered the spent wash as well. Therefore, there was no justification for the 8% demand on the Bio-earth/Bio-compost sale price. The Tribunal referenced case laws supporting the appellants' position, emphasizing that waste products used in manufacturing exempted goods do not necessitate duty credit reversal. Consequently, the Tribunal set aside the impugned order and allowed the appeal with consequential relief.In conclusion, the Tribunal's decision focused on the distinction between waste products and by-products in the manufacturing process. By clarifying the applicability of Rule 6 in the context of waste products like spent wash, the Tribunal provided relief to the appellants, emphasizing the precedence of legal interpretations favoring the non-reversal of duty credits on waste products used in manufacturing exempted goods.
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