Tribunal Allows Appeal: Appellant Eligible for Cenvat Credit on Inputs Despite Lower Duty on By-Product.

The Tribunal set aside the impugned orders, allowing the appeals, and concluded that the issue was no longer res-integra. The appellant was deemed eligible for the Cenvat credit on inputs despite the lower duty rate on the by-product, Ammonium Sulphate. The judgment favored the appellant, referencing consistent previous rulings, and was pronounced in open court on 29.08.2024.

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Issues:
- Availing Cenvat credit on inputs generating a by-product subject to lower duty rate
- Eligibility for Notification No. 12/2012-CE exemption
- Denial of Cenvat credit on inputs due to availing lower duty rate for by-product

Analysis:
The appellant availed Cenvat credit on inputs Potassium Cyanide and Sodium Cyanide, which generated a by-product, Ammonium Sulphate, cleared at a lower duty rate of 1%. The department contended that availing Cenvat credit on inputs made the appellant ineligible for the 1% duty exemption under Notification No. 12/2012-CE, resulting in a demand for the differential amount of 5%. The appellant argued that Cenvat credit cannot be denied on inputs contained in the by-product, citing previous Tribunal decisions in their favor. The Tribunal noted that the appellant availed Cenvat credit on the inputs for the final products but claimed the lower duty rate exemption only for the by-product. As Ammonium Sulphate was a by-product, no duty of 6% could be imposed, making the demand unsustainable. The Tribunal referenced previous orders in the appellant's favor on the same issue and set aside the impugned order, allowing the appeal.

In a subsequent hearing, the appellant's representative submitted previous decisions in the appellant's favor, requesting the disposal of the present appeals based on those decisions. The Revenue reiterated the findings of the impugned order. The Tribunal, after considering the submissions and records, reiterated that Ammonium Sulphate, being a by-product of the final products, was not liable for payment under Rule 6(3) of the Cenvat Credit Rules, based on previous orders in the appellant's favor. The Tribunal referenced specific orders and observed that the issue was no longer res-integra, setting aside the impugned order and allowing the appeal.

Based on the consistent view taken by the Tribunal in the appellant's own case on the issue of Ammonium Sulphate being a by-product, the impugned orders were deemed unsustainable. The Tribunal set aside the orders, allowing the appeals and concluding that the issue was no longer res-integra. The judgment in the appellant's favor was pronounced in open court on 29.08.2024.

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