2013 (3) TMI 187

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....ste sludge is an excisable item covered under sub-heading 382490 of the Central Excise Act and is an exempted product and since the appellant have not maintained separate account and inventory of the Cenvated inputs used for manufacture of dutiable final product and exempted final product, in respect of clearances of sludge (exempted final product), they would be liable to pay an amount equal to 10% of its sale value in accordance with the provisions of Rule 6(3) of Cenvat Credit Rules, 2004. It is on this basis that a show cause notice dated 22-10-2009 was issued to the appellant for demand of an amount of Rs. 3,61,239/- along with interest and also imposition of penalty on them under Rule 15 of the Cenvat Credit Rules. The show cause noti....

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....he facts of this case. He, therefore, pleaded that the appellant have a strong prima facie case and, hence, the requirement of pre-deposit of amount demanded under Rule 6(3), interest thereon and penalty may be waived for hearing of the appeal and recovery thereof may be stayed, till the disposal of the appeal. 4. Ms. Ranjana Jha, ld. Jt. CDR further contended that Section 2(d) has been amended w.e.f. 10-5-2008 by introducing an explanation that the goods include any article, material or substance which is capable of being sold for some consideration and such goods shall be deemed to be marketable. It is pleaded that in view of the aforesaid amendment, the sludge cleared by the appellant on payment of duty squarely falls within the de....