By-product liability under Cenvat Credit Rules rejected for ammonium sulphate generated during manufacture

Ammonium sulphate generated as a by-product in manufacture was held not liable to payment under Rule 6(3) of the Cenvat Credit Rules, 2004, because the issue was treated as settled by earlier consistent decisions in the same assessee's case. The Tribunal followed its prior view that a by-product arising in the course of manufacture does not attract such liability, and therefore the demand was not sustainable. The matter was decided in favour of the assessee, with no amount payable on the impugned by-product.

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Issues: Whether Ammonium Sulphate, being a by-product arising during manufacture of the final product, was liable to payment of any amount under Rule 6(3) of the Cenvat Credit Rules, 2004.

Analysis: The dispute was treated as no longer res integra. The Tribunal relied on its earlier decisions in the same assessee's case holding that Ammonium Sulphate, as a by-product generated in the course of manufacture, was not liable to payment under Rule 6(3) of the Cenvat Credit Rules, 2004. In view of the settled position and the earlier consistent orders, the demand was not sustainable.

Conclusion: The issue was decided in favour of the assessee, and no amount was payable under Rule 6(3) of the Cenvat Credit Rules, 2004 on the impugned by-product.

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