2015 (6) TMI 432

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....f gelatin by using input Hydrochloric acid. In the process of manufacture of final product hazardous waste emerges known as Mother Liquor. This liquor is treated with other chemicals and subsequently cleared without payment of duty. The department alleged that the common input HCL is used for manufacture of gelatin which is a dutiable and exempted product. The period involved in this case relates to September, 1996 to February, 2003. 3. After hearing both the sides, we find that this issue stands settled by the Hon ble Supreme Court in the appellant s own case reported in 2014 (303) ELT 321 (SC), on identical issue pertaining to the demand for the period March, 2002 to December, 2003 in OIO No. 21/2004 dated 23.12.2004. This order was ap....

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....il the entire credit of duty paid on HCL which is used as input. 24. It is, however, contended by the revenue that on the introduction of Rule 57CC, the petitioner was liable to maintain separate account so as to ascertain the quantity of HCL used in the manufacture of exempted phosphoryl A and B , and since no such account was maintained the petitioner was liable to pay amount at 8% of the value of the phosphoryl A and B under Rule 57CC. 25. There is no merit in the above contention of the revenue. Under the Modvat Scheme, credit of duty paid on inputs can be availed only if such inputs are used in the manufacture of dutiable final product. Where a manufacturer uses common inputs to manufacture both dutiable final product....

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.... 27. The fact that the waste mother liquor arising in the manufacture of gelatin was further processed to manufacture exempted phosphoryl A and B would not attract Rule 57CC, because, if Rule 57CC was not applicable at the time of clearance of the waste mother liquor arising in the manufacture of dutiable gelatin, then the said rule cannot be applied merely because mother liquor was further processed to manufacture exempted final product, namely, phosphoryl A and B . In other words, liability to pay the presumptive amount under Rule 57CC would arise only if the waste mother liquor is held to be a final product. It is not even the case of the revenue that the waste mother liquor arising in the manufacture of gelatin is a final product. ....