TaxTMI Login
Just a moment...
Press 'Enter' to add multiple search terms. Rules for Better Search
When case Id is present, search is done only for this
of 
of 
No Folders have been created
Are you sure you want to delete "My most important" ?
NOTE:
of of 
All Case Laws
of of All Case Laws
Note
Bookmark
Share
Don't have an account? Register Here
of <h1>Tribunal rules against revenue authority on exempt product demand</h1> <h3>HINDUSTAN COPPER LTD. Versus CCE, JAIPUR</h3> HINDUSTAN COPPER LTD. Versus CCE, JAIPUR - 2006 (75) RLT 756 (CESTAT - Del.) Issues:Interpretation of Rule 57CC in relation to the supply of sulphuric acid under Chapter X procedure and the liability to pay 8% of the price of the exempt final product. Application of Modvat Rules regarding the emergence of by-products and denial of credit on inputs. Determination of whether a part of the input is used in the manufacture of a by-product and the impact on the payment of duty.Analysis:1. The appellant, a leading copper manufacturer, smelts copper concentrate to produce copper cathode and sulphuric acid. The issue arose when the revenue authorities treated the supply of sulphuric acid under Chapter X procedure as the clearance of an exempt final product, leading to a demand for payment under Rule 57CC (1).2. The appellant argued that Rule 57CC should not apply as the entire copper concentrate is used in manufacturing the dutiable final product, copper cathode. They relied on the Swadeshi Polytex Ltd. case, emphasizing that the emergence of a by-product does not change the fact that the input is wholly used in the production of the final product.3. The appellant further contended that Modvat Rules allow credit on inputs even if a by-product emerges, citing Rule 57D. They argued that the emergence of a by-product should not affect the credit on the input used in manufacturing the main final product.4. The Tribunal analyzed Rule 57C, which prohibits credit on inputs used in the manufacture of exempt final products. It was highlighted that Rule 57CC applies when a manufacturer produces both dutiable and exempt final products from the same input, necessitating payment for the exempt product.5. The Tribunal considered the Apex Court's ruling in the Swadeshi Polytex Ltd. case, emphasizing that the emergence of a by-product does not alter the input-final product relationship. The judgment clarified that no part of the input can be attributed to the by-product's production, supporting the appellant's argument.6. The Tribunal rejected the revenue authority's invocation of Rule 57CC, stating that sulphuric acid, as a by-product, does not affect the input-final product nexus. Citing a previous case involving a similar scenario, the Tribunal ruled in favor of the appellant, allowing the appeal and granting consequential relief.7. The judgment reaffirmed that by-products, like sulphuric acid, arising during the manufacturing process do not impact the credit on inputs used for the main final product. The decision aligned with the principles established in the Swadeshi Polytex Ltd. case, ensuring that no payment under Rule 57CC was warranted in this context.
TaxTMI 