2017 (7) TMI 166

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....redit Rules, 2002 (CCR) along with interest. Penalty of equal amount has also been imposed. 2. The brief facts of the case are that the appellant is registered with the Central Excise department for the manufacture of various petroleum products viz. motor spirit, high speed diesel, SKO, Naptha, Furnace oil, liquid petroleum gas (LPG), Aviation Turbine Fuel (ATF), propylene etc. falling under Chapter 27 of the Central Excise Tariff and are availing the benefit of Cenvat Credit on the inputs/capital goods. They are also availing exemption from payment of duty in respect of goods captively consumed in their factory under Notification No. 67/95-CE dt. 16.03.1995. During the audit for the period 2001-2002, the appellant was found to be engage....

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..... Ld. Advocate submits that the inputs namely Sulphur Absorption Catalyst has been used in relation to the manufacture of final products. The Catalyst is required for treatment of H2S which is generated during the manufacturing process of the final products of the appellant. It was further argued that in the appellants own case Cenvat Credit has been allowed on the capital goods used in SRU. She contended that Rule 6 is not applicable to the byproducts/waste generated during the manufacturing process. She relied upon the following case laws:- 1. IOC Ltd. Vs. CCE, Rohtak 2013 (297) ELT 394 (Tri.-Del.) 2. Hindustan Zinc Ltd. Vs. CCE 2015 TIOL-2075-CESTAT-Del. She also contended that the demand is completely time barred as relevant fa....

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....amount under Rule 6(1) of the Cenvat Credit Rules. Hence the essential question to be decided is whether Sulphur which emerges as a result of the Desulphurisation of HSD is an exempted final product for which input namely Sulphur Absorption Catalyst has been used in its manufacture. It is noted that Sulphur which is produced by the appellants in SRU does not arise on its own during the course of manufacture of HSD in the normal course. In the instant case, it is through active intervention from the appellant for the purpose of purifying the HSD that Sulphur is produced. Sulphur thus produced is manufactured intentionally in the SRU from inputs like Hydrogen Sulphide Gas and some other Catalyst. The Hydrogen Sulphide Gas is then treated in a....

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....mpted goods" means goods which are exempt from the whole of the duty of excise leviable thereon, and includes goods which are chargeable to "Nil" rate of duty; "final products" means excisable goods manufactured or produced from inputs, except matches; Sulphur produced in the process of Desulphurisation is an excisable goods and is not only marketable but actually sold commercially by the appellant. Since it is chargeable to nil rate of duty in the Tariff, it is in the category of exempted goods. This is also clear from their own case law relied on by the ld. Advocate i.e. 2013 (297) ELT 394 (Tri. Del.), wherein this Tribunal itself has given the finding that Sulphur is an exempted final product. In view of the foregoing, demand along....

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....is in relation to a proceeding on capital goods. It is settled law that Department's knowledge as to the facts in another proceeding is not relevant and in a given case whether there was suppression of information is a question of fact to be established in each case, as has been held by the Hon'ble Supreme Court in the case of Coaltar Chemicals Manufacturing Co. Vs. Union of India 2003 (158) ELT 402 (S.C.). Even if the contention of the Ld. Counsel is admitted for a moment that it came to the knowledge of Department from the statement dt. 14.06.2002 of Sh. G.K. Seth, Deputy Finance Manager in the show cause notice dt. 26.03.2004, it is clear from the facts of the case that the issue of irregular taking of credit came to the notice o....