TaxTMI 
TaxTMI 
2009 (12) TMI 471
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....cturers of Zinc Ingots, Lead to Ingots and Sulphuric Acid etc. falling under Chapter sub-heading Nos. 7901.10 and 7801.10 respectively and Inter alia, by products emerged during the/to manufacture of main products i.e. Zinc Celcine, Zinc Residue, Zinc Slag, Lead Slag, Lead Dross, Antimony Dross, Zinc Dross, Scrub or Dust, Bata Cake, Slnster Fines and Waltz Kiln Slag failing under Chapter 26 of Central Excise Tariff Act, 1985. The appellants have been availing modvat credit of duty on various excisable inputs under provisions of Rule 57A after filing the declaration under Rule 57G of Central Excise Rules, 1944. In the instant appeals during the period from 1/92 to 3/92 and 1/93 to 4/93 in the manufacture of which various duty paid inputs as ....
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....since availed credit under Rule 57A on the inputs used in the manufacture of Zinc Residue. Beta Cake. Waltz Kiln Slag and Lead Slag, this notification is not applicable to them. They are therefore, liable to pay duty on Zinc Residue, Beta Cake, waltz Kiln Slag and Lead Slag in the absence of any other Notification providing exemption to them." The Commissioner (A) relied on Case Laws, which are not relevant to the issue and discussed about the applicability of the Modvat provisions. Without coverage of any exemption notification and without assigning any valid reasons to set aside the demands of duty on zinc Residue. Beta Cake. Waltz Kiln slag and Lead Slag that were confirmed by the Assistant Commissioner rightly, the Commissioner (A) s....
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....s residue or waste. 8. On this factual matrix we find that the issue in this case is squarely covered by the decision of this bench in the respondent's own case cited supra. We may reproduce the said ratio : "On our careful perusal, we notice that this judgment relied by learned JDFR is nto applicable, as it is only dealt with the classification dispute pertaining to Spent Sulphuric Acid. Likewise the ratio of National Information Technologies Ltd. V. CCE, Bhopal - 2005 (179) E.L.T. 404 (Tri.-Del.) is also distinguishable. As in that case the inputs used for manufacture of dutiable as well as exempted goods were involved. The exempted goods were cleared without maintaining separate inventory/accounts in respect of duty paid inputs use....
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....rse of manufacture of the final product, whether or not such waste or refuse or by-product is exempt from the whole of the duty of excise leviable thereon or chargeable to nil rate of duty or is not specified as a final product under Rule 57A." It is, thus, apparent from the provisions of Rule 57D(1) of the Rules that credit shall not be denied on the ground that part of the inputs is contained in a by-product. It is also not disputed that by-product in the present matter, namely, Sulphur Dioxide gas is taken to Sulphuric Acid Plant for converting the same into Sulphuric Acid. We agree with the learned SDR that Sulphuric Acid has been obtained by the appellants as a conscious act. However, it cannot be claimed by the Revenue that any part o....
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....s not whether the process undertaken by the appellants to get Sulphuric Acid amounts to manufacture or not The issue involved is whether the Modvat Credit of the duty paid on LDO is to be denied proportionately as the Sulphuric Acid, which has already been obtained by the appellants is exempted from payment of duty. It has been observed by the Tribunal in the case of Aarti Drugs Ltd. that "by insertion of Rule 57CC, there was no intention to eliminate the benefit available under Rule 57D(1) to a by product.... The Marketability or otherwise of by-product is not really an issue.' We therefore, hold that the Modvat Credit is not, deniable to the appellant. Accordingly, we set aside the impugned order and allow the appeal. 4.1 Likewise the ....