2006 (2) TMI 568

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....o Aug.'97 and Feb.'99 to Feb.'02. The demand is under Rule 57CC/Rule 57AD of the Central Excise Rules, 1944/Rule 6 of the Cenvat Credit Rules, 2001. The adjudicating authority also imposed a penalty of Rs. 1 crore on the party. The present application seeks waiver of pre-deposit and stay of recovery in respect of both the amounts. We have heard both sides and considered their submissions. 2. The case of the appellants, put across to us by ld. Counsel, is that the above provisions (which were in force during successive parts of the aforesaid period of dispute) were not applicable to their case inasmuch as Hydrochloric acid (the Modvatable/Cenvatable input which is in the centre of the present controversy) was not used as a common inp....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....ss involving an aqueous acidic extract called Mother liquor (Phosphoryl liquor), which resulted from treatment of bone with Hydrochloric acid. Thus, apparently, Hydrochloric acid plays a direct and dominant role in the conversion of the basic raw material (bones) into Phosphoryl A & B. From the point at which "Phosphoryl liquor"and "Ossein"are formed, the latter traverses a divergent route to get converted ultimately to Gelatin. Thus, from the facts of this case, it appears that Hydrochloric acid is an input used in the manufacture of the exempted final products and, if that be so, the assessee needs to pay 8% of the sale price of such products in terms of the aforesaid Rules for the aforesaid period. 3. Ld. Counsel has pointed out ....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....ay order which relies on Rama Industries (supra) or on the strength of the one-line order which did not disclose any ratio. Ld. Counsel has also relied on the Tribunal's decision in EID Parry India Ltd. v. Commissioner of Central Excise, Trichy [2004 (176) E.L.T. 734 (Tri.-Chennai)], wherein, in respect of an assessee engaged in the manufacture of sugar from sugarcane, it was held that the chemicals used for manufacture of sugar from sugarcane were not to be treated as having been used in the manufacture of bio-compost (exempted final product) from pressmud (a waste material generated in the course of manufacture of sugar from sugarcane). Again, we are not impressed with the reliance placed on EID Parry case inasmuch as, on the facts of the....