Cenvat credit reversal not required on clearance of manufacturing waste or by-product under Rule 6

Rule 6(3) of the Cenvat Credit Rules, 2004 does not apply to clearance of waste, refuse or by-product arising during manufacture. CESTAT Mumbai followed its earlier identical ruling and the settled position that furnace slag and similar manufacturing waste are not subject to reversal of Cenvat credit merely because inputs remain embedded in the waste or by-product. It also relied on the continuing departmental clarification supporting admissibility of credit in such cases. The demand for reversal of credit was therefore not sustainable.

---

---

Issues: Whether reversal of Cenvat credit under Rule 6 of the Cenvat Credit Rules, 2004 was required on clearance of waste or by-product generated during manufacture.

Analysis: The dispute concerned clearance of furnace slag and other waste or refuse arising in the manufacturing process. The Tribunal followed its earlier decision on an identical issue and the settled position that Rule 6(3) does not apply to waste or by-product. It also relied on the principle that Cenvat credit is not to be denied where inputs are contained in waste, refuse or by-product, and that the departmental clarification supporting admissibility remained effective.

Conclusion: Rule 6(3) had no application to the clearance of waste or by-product, and the demand for reversal of credit could not be sustained.

---