2020 (1) TMI 100

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....said final products. Department during the scrutiny of appellant's record observed that they have not included the amounts received as "other income" amounting to Rs. 7,20,000/- in the assessable value. Accordingly, a differential duty to the tune of Rs. 51,912/- was proposed to be recovered. In addition, Department observed that the appellants are not only manufacturing dutiable goods, but also the exempted goods. However, have not maintained the separate records in respect of inputs used in manufacture of the said dutiable and exempted goods. They have cleared 2051.255 MTs of spent acid (Sulfuric Acid), during the period from May, 2010 to March, 2011 to different fertilizer units i.e. they have cleared the exempted goods alongwith their d....

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....al, Ahmedabad in the case of Nirma Ltd. vs. Commissioner of Central Excise, Ahmedabad reported in 2012 (276) ELT 283. 4. While rebutting these arguments, it is submitted on behalf of the respondent that Show cause notice is clear enough to hold that the appellant is not only manufacturing the detergents and soaps but is also manufacturing the Sulfuric Acid. Since the said Sulfuric Acid is being cleared to the fertilizer companies, the same becomes entitled for the exemption and as such, becomes the exempted goods. Hence, Rule 6 of Cenvat Credit Rules, 2004 has rightly been applied by the Department and the demand thereof has rightly been confirmed. It is further submitted that otherwise also there has been an amendment in Rule 6 of Cenva....

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....uld be "manufacture of exempted goods" which can be clearly inferred from a bare perusal of Rule 6 (1). The obligation for reversal of credit can arise only in case of manufacture of dutiable final product and manufacture of exempted products, and in case the exempted goods are not manufactured there is no substantive liability for reversal of credit. By amendment in Rule 6 non-excisable goods cleared for a consideration from the factory may have the effect of treating byproduct or waste to be an exempted good, but cannot result in the same to be called as a manufactured goods, and therefore despite the aforesaid amendment, and also in light of the ratio laid down by the Hon'ble Supreme Court in the case of Union of India vs M/s DSCL....

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.... "In the present case it could not be pointed out as to whether any process in respect of Bagasse has been specified either in the section or in the chapter notice. In the absence thereof this deeming provision cannot be attracted. Otherwise, it is not in dispute that Bagasse is only an agricultural waste and residue, which itself is not the result of any process. Therefore, it cannot be treated as falling within the definition of section 2 (f) of the act and the absence of manufacture, there cannot be any Excise duty. Since it is not a manufacture, Rule 6 of the CENVAT Credit Rules 2004, shall not have an application rightly held by the High Court." 7. In view of entire above discussion and keeping in view the certificat....