2006 (9) TMI 59

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....sakhapatnam. Since the issue involved in both the appeals is one and the same, we are passing a common order. 2.Shri S.V. Ratnam, learned Advocate appeared for M/s. NCS Distilleries Pvt. Ltd. and Shri K.S. Reddy, JDR for the Revenue. 3.The unit is a Distillery, manufacturing Extra Neutral Alcohol and Denatured Ethyl Alcohol. The input is molasses. The unit takes Cenvat credit on the duty paid molasses. The molasses is used in the manufacture both Extra Neutral Alcohol and Denatured Ethyl Alcohol. The Extra Neutral Alcohol attracts nil rate of duty. However, the Denatured Ethyl Alcohol is liable to 16% duty. Since a common input namely, molasses is used for both the dutiable and exempted final products, the unit reversed 8% of the sale val....

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....o the party. The Deputy Commissioner in his Adjudication order 3/2002 dated 31-1-2002, dropped the proceedings. The Revenue went in appeal against the above mentioned Adjudication order to the Commissioner (Appeals). The Commissioner (Appeals) in his Order-in-Appeal No. 2/2005 (V-II) (D) C.E. dated 11-3-2005, has rejected the Department's appeal. Hence the Revenue has come in appeal against the order of the Commissioner (Appeals). The duty involved is Rs. 81,64,105/- This is the subject matter of the Appeal No. E/457/05. The period involved is 1-4-2000 to 28-2-2001. 3.For the subsequent period covering 1-3-2001 to 28-2-2002, two Show Cause Notices were issued initially. They were answerable to the Deputy Commissioner of Kakinada. However i....

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.... the products dutiable and exempted. There is no need to go into details and technicalities of the manufacturing process. The questions to be asked are :- (1)What are the final products. (2)Is there any common input. (3)Whether one product is exempted and the other chargeable to duty. In the present case, the final products are Extra Neutral Alcohol and Denature Ethyl Alcohol. Denatured Ethyl Alcohol is obtained by adding denatured element to "Heads & Tails" for which also the input is Molasses. This is not denied. It is not important at what stage one of these products emerges. What is important is whether the above mentioned products are final products or not. As regards the second question, it is not the Revenue's contention that mol....