2010 (5) TMI 354

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....ation to the manufacture of finished products. The Appellants, among other items, had taken Cenvat credit of duty paid on furnace oil and lubricant oil in terms of Rule 3 of Cenvat Credit Rules, 2002. The lubricant oil after being used over a period of lime is drained out. During the period of dispute, the same was sold as waste oil without payment of duty. The furnace oil is used for generation of electricity and the same before being pumped into generator, passes through a separator where 'by' centrifugal operation, the impurities are separated. The impurities known as sludge are taken out and during the period of dispute, the same was sold being without payment of duty. The Department was of the view that the waste oil and sludge being c....

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....mmissioner's order observing that when input duty Cenvat credit has been taken in respect of lubricants, at the time of removal of the waste oil an amount equal to the duty chargeable on the same would be required to be paid as per the provisions of Rule 3(4) of Cenvat Credit Rules, 2002. It is against this order of the Commissioner (Appeals) that the present appeal has been filed. 2. Heard both the sides. 2.1 Shri Z.U. Alvi, Advocate, learned Counsel for the Appellant, pleaded that the clearance of used and drained out lubricant oil in form of waste oil would not attract the provisions of Rule 3(4) of Cenvat Credit Rules, 2002, as while Rule 3(4) of Cenvat Credit Rules, 2002 was applicable for the removal of cenvated inputs or capita....

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....re removed as such, from the factory, the manufacturer of final products was required to pay an amount equal to the duty chargeable on such inputs at the rate of duty on the date of removal and on the value determined as per the provisions of Section 4 of Central Excise Act. W.e.f. 1-3-03 as per the pro visions of amended sub-rule (4) of Rule 3 of Cenvat Credit Rules, 2002 in case of such removal of cenvated as such the amount payable was an amount equal to the credit availed in respect of such inputs. However, during the period of dispute from the wordings of sub-rule 4 of Rule 3, it is clear that this provision be comes applicable only when the inputs in respect of which Cenvat credit has been taken are removed as such. Here the inputs in....