2011 (4) TMI 438

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....B.S.V. Murthy,   The appellants are engaged in the manufacture of Mono Ethylene Glycol (MEG), Di-Ethylene Glycol (DEG) and Tri-Ethylene Glycol (TEG). The said Ethylene Glycols are manufactured from Ethyl Alcohol. Under the provisions of Section 11 of the Bombay Prohibition Act, 1949, the use of Ethyl Alcohol has to be under and in accordance with the terms of a licence granted under the sa....

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....availed CENVAT credit of the duty paid on the Acetone procured by them. The appellants sent out the duty paid Acetone to the manufacturer-supplier of Ethyl Alcohol who hold the requisite licence under the said Rules for denaturing and from whom they procured the Ethyl Alcohol. The duty paid Acetone is sent out by the appellants under the provisions of Rule 4(5)(a) of the Cenvat Credit Rules, 2004 ....

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....t Acetone is an input for the manufacture of Ethyl Alcohol for manufacturer, who denatured the Ethyl Alcohol by using Acetone for the appellant and therefore, the CENVAT credit was not available to the appellants. Accordingly, duty demand of Rs.97,67,104/- with interest proposed to be demanded in two show-cause notices has been confirmed and penalty under Rule 15 of Cenvat Credit Rules, 2004 read ....

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....its that the inputs sent out by the appellants cannot be considered as input since it is used only for denaturing and it cannot be considered to have been used in the manufacture of Ethyl Alcohol. He also relies upon several decisions.   5. We have considered the submissions made by both sides. We are not going into the definition of inputs, correctness of procedure of movement of Acetone ....