Rule 6 Cenvat credit does not apply to incidental by-products and waste cleared during manufacture after the 2015 amendment.

By-products and waste arising incidentally during manufacture of dutiable final products are not treated as independently manufactured exempted goods for Rule 6 of the Cenvat Credit Rules, 2004. The amendment effective from 01.03.2015 did not change that position, and cleared by-products or waste do not attract reversal or payment merely because consideration is received on clearance. The Tribunal applied the settled view of higher judicial authorities and treated Rule 6 as inapplicable to such incidental clearances, rendering the demand, penalty, and adverse appellate order unsustainable.

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Issues: Whether Rule 6 of the Cenvat Credit Rules, 2004 applies to by-products or waste products emerging during manufacture of dutiable final products after 01.03.2015, so as to require reversal or payment with respect to such clearances.

Analysis: The dispute turned on whether by-products and waste products generated in the course of manufacture could be treated as exempted goods for the purpose of Rule 6. The governing position, as applied by the Tribunal, was that by-products or waste arising incidentally during manufacture are not independently manufactured final products. The amendment brought in from 01.03.2015 did not alter that position so as to bring such incidental by-products or waste within Rule 6. The issue was treated as already settled by higher judicial authorities and therefore no contrary liability could be fastened on the appellant merely because such goods were cleared for consideration.

Conclusion: Rule 6 of the Cenvat Credit Rules, 2004 was held inapplicable to the by-products and waste products in question, and the demand, penalty, and appellate rejection were unsustainable.

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