TaxTMI 
TaxTMI 
2007 (2) TMI 384
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....he separate accounts of the inputs used in the exempted and non-exempted final products were not maintained. 2. The appellant was availing Cenvat credit facility on the different chemicals used in the manufacture of refined edible oil. The appellant was engaged in the manufacture of refined edible oil from the seeds/oiled cakes by solvent extraction method during which process solvent extracted oil and de-oiled cake were produced. The solvent extracted oil was further used in the refinery to get refined edible oil, which was a dutiable item. During the process of refining, various input chemicals such as, phosphoric acid, caustic soda, sulphuric acid etc. were used and Cenvat credit was taken in respect of these inputs. In the process....
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....d sludge etc. Since the appellant had complied with the provisions of Rule 6(2) of the Cenvat Credit Rules, 2002, an amount equal to 8% of the total price of the exempted final product became payable under Rule 6(3)(b) of the said Rules. 5. The learned counsel appearing for the appellant submitted that, on a proper construction of Rules 6(2) and 6(3) of the said Rules, it should have been held by the authorities below that since the appellant was manufacturing refined edible oil, the inputs were meant for use in the manufacture of such edible final product and they were not meant for use in the manufacture of exempted goods, the mere fact that the exempted goods came to be incidentally manufactured, will not alter the fact that the in....
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....t had, while describing the process, pointed out that the de-gummed oil was acidified with phosphoric acid and neutralized with sodium hydroxide and washed thoroughly in high speed mixers and vacuum dried. In the process of neutralization, soap stock was separated and it was then acidulated to recover "acid oil" as a by-product. Therefore, admittedly "acid oil" was a by-product, which was regularly manufactured while manufacturing the refined oil. In Rallies India Ltd. (supra), the Larger Bench, while referring to the product phosphoryl 'A' and 'B' which was consciously manufactured, held in para 9 of the judgment that their emergence was to be treated as a result of intended manufacture and not an unwanted product. In the present case, "ac....