TaxTMI 
TaxTMI 
2019 (6) TMI 1614
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....2. The issue involved in the instant appeal is whether the appellant, Tata Steel Ltd., was required to pay an amount equal to 8% or 10%, as applicable, of the total price of coal tar and coal gas, which comes into existence during the manufacture of coke at the time of their clearance from Tata Steel's steel plant at Jamshedpur, in terms of Rule 6(3)(b) of the Cenvat Credit Rules on clearances of the said goods during the period from June 2003 to August, 2007. 3. The facts of the case in brief are that in its steel plant, Tata Steel manufactures iron and steel products which are cleared upon payment of excise duty. For manufacture of such products, Blast Furnace and L.D. Converters are required and used. One of the essential raw materials used in or in relation to the manufacture of such duty paid steel materials is "coke". In the coke plant inside the steel plant, coal is carbonised to make coke. During the process of carbonisation, coal gas and coal tar are obtained as and by way of technological necessity. The coke obtained is transferred to the Blast Furnace/L.D. Converter whereas the coal tar and coal gas (hereinafter referred to as "the said goods") are cleared for sale to....
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....ar, light oil, ammonia liquor, and, coke oven gas are also produced. Coke is used principally as a fuel and reductant in the blast furnace for iron making. The other products are further refined into commodity chemicals such as ammonium sulphate, benzene, toluence, xylene, naphthalene, pyridine, phenanthrene, anthracene, creosote, road tars, roofing pitches, and pipeline enamels. The coke oven gas is a valuable heating fuel used mainly within steel plants." (ii) "The Columbia Encyclopedia" wherein, dealing with 'coal gas' it has been observed as follows:- "Coal gas, gas obtained in the destructive distillation of soft coal, as a by-product in the preparation of COKE. Its composition varies, but in general it is made up largely of hydrogen and methane with small amounts of other hydrocarbons, carbon monoxide (a poisonous gas), carbon dioxide, and nitrogen. It is used as a fuel and illuminant." (iii) "Wikipedia" wherein, dealing with 'coal tar', it is observed as follows: "Coal tar is a brown or black liquid of high viscosity, which smells of naphthalene and aromatic hydrocarbons. Coal tar is among the by-products when coal is carbonized to make co....
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....ies India Limited Vs. Commissioner of Central Excise- 2009 (233) ELT 301 (Bom), which had reversed the decision of the Larger Bench of the Tribunal in Rallies India Ltd. Vs. CCE(supra), which was relied in issuing the show cause notice. 9.1 Dealing with, inter alia, the contention raised in the instant case also by the learned Special Counsel on behalf of the Revenue, the Hon'ble Supreme Court in the above decision, at paragraphs 21 to 26 thereof, observed and held as follows: "21. As already pointed out, argument of the learned Solicitor General was that Rule 57CC and Rule 6 of the Modvat/Cenvat Rules respectively require the literal rule of interpretation which needs to be applied, as the language of these was unambiguous in this behalf. We may record that as per the learned Solicitor General, the provisions of Rule 57CC or Rule 6 envisage common use of inputs in two final products i.e. one dutiable and other exempted from the applicability of the same. He submitted that when two final products emerge out of use of common inputs, one excisable and the other exempt, the provisions will apply. The question of intention of the assessee to manufacture the exempted product....
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....isability of goods manufactured or produced" and only if the requirements of this test are satisfied, the goods can be 'final products' and never 'byproducts'. On this basis, the learned Solicitor General submitted that even an admission made before the Tribunal in the Birla Copper case of the goods being a 'by-product', cannot be relied on by the respondent. 24. While pleading that the aforesaid interpretation to these Rules be accepted by this Court, submission of Mr.Parasaram was that in such an eventuality the judgement in this case of Swadeshi Polytex Ltd. Vs. CCE; 1989 (44) ELT 794 was not applicable, nor was the judgement fin CCE v. Gas Authority of India Ltd. : 2008 (232) ELT 7 relied upon by the respondent. Likewise his submission was that judgement of the Bombay High Court in the case of Rallies India Ltd. v. Union of India ; 2009 (233) ELT 301 was erroneous wherein view taken is contrary to the aforesaid submission. 25. These arguments may seem to be attractive. However, having regard to the processes involved, which is already explained above and the reasons afforded by us, we express our inability to be persuaded by these submissions. We have already ....
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....sed by the Revenue herein as to what is a "byproduct". The stand taken by the Revenue and in the impugned order that coal gas and coal tar are not by-products, therefore cannot be accepted. 9.2 In paragraphs 17 to 19 of the judgment it has been further observed by the Hon'ble Supreme Court as follows: "17. In these circumstances the position taken now by the appellant that sulphuric acid cannot be treated as a by-product cannot be countenanced. Mr.S.K.Bagaria, learned Senior Counsel appearing for the respondent while explaining the manufacturing process in detail, also pointed out that the ore concentrates (Zinc or Copper) are completely utilised for the production of zinc and copper and no part of the metal, zinc or copper forms part of the sulphuric acid which is cleared out. It was submitted that the extraction of zinc from the ore concentrate will inevitably result in the emergency of sulphur dioxide as a technological necessity. IT is not as though the Respondents can use lesser quantity of zinc concentrate only to produce the metal and not produce sulphur dioxide. In other words, a given quantity of zinc concentrate will result in emergency of zinc sulphide and su....