2018 (7) TMI 674

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....fluent sludge which emerges in the Effluent Treatment Plant, where the effluents arising during the course of manufacture in the factory are treated as required under the pollution control norms. The sludge so arising is cleared periodically by the appellant. Such sludge is cleared without payment of duty in terms of exemption notification No. 76/86 -CE.,dated 10.02.1986. The Revenue was of the view that in terms of Rule 6(3A) of the Cenvat Credit Rules, the appellant is required to reverse an amount @ 10%/5% of the exempted goods as prevalent during the period of dispute, since a part of the inputs for which Cenvat credit has been availed was contained in such sludge. Accordingly, after issuing show-cause notice an amount of Rs. 17,83,000/....

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....eported in 1987 (28) E.L.T. 258 (Mad.) and submitted that waste and scrap is to be considered as by-product of the manufacturing process and hence, the reversal as required under Rule 6 (3) is required to be made. In this regard, he relied on the following case laws:- (i) Commissioner of Central Excise, Indore Vs M/s. C.T. Cotton Yarn Ltd. reported in 2010 (259) E.L.T.3 (S.C.); (ii) M/s. Khandelwal Metal & Engineering Works Vs Union of India reported in 1985 (20) E.L.T.222 (S.C.); and (iii) Commissioner of Sales Tax, Bombay Vs M/s. Bharat Petroleum Corpn. Ltd, reported in 1995 (77) E.L.T. 790 (S.C.). 5. The Ld.Counsel for the appellant in his rejoinder relied on the decision of the Hon'ble Bombay High Court in the case of M/s. Ra....