TaxTMI 
TaxTMI 
TaxTMI 
2021 (8) TMI 125
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....bserved that the appellant has sent 1,41,396.180 litres of chemical for job work under job work Challan for processing. They have received only 90620.290 litres of chemicals. The chemical not received by the appellant i.e. 50775.890 litres is alleged to have the value of Rs. 1,01,15,903/- involving Central Excise duty of Rs. 16,22,501/- from their job worker. The quantity of process loss i.e. the quantity of waste/ scrap unrecoverable was also found missing from either job Challan or in the job register maintained for the purpose. The said amount of excise duty during the period from 1.3.2003 to 31.3.2005 has accordingly been alleged to have not been paid in contravention to the provisions of Rule 4(5) of CENVAT Credit Rules, 2002 (herein a....
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....e appellant from the job worker was less by about 32-36% of total quantity of HMDSO. 5. To support the submission, the appellant has relied upon their in house test and prepartion certificate and also on the test report by M/s. ARBRO Pharmaceuticals Ltd., a Government approved test house. It is submitted that Rule 4(5) of Cenvat Credit Rules has wrongly been invoked by the Department as appellant neither has sent input as such nor has sent the same after partial processing. But what infact has been sent is by-product (HDMSO) generated during the manufacture of final product from the raw material (HDMS). It is impressed upon that otherwise the inputs on which CENVAT Credit was taken has been fully used in or in relation to manufacture of th....
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....is established from the records, challans or memos or any other document produced by the assessee taking the CENVAT credit that the goods are received in the factory withing one hundred and eighty days of their being sent to a job worker and if the inputs or the capital goods are not received back within one hundred eighty days, the manufacturer shall pay an amount equivalent to the CENVAT Credit attributable to the inputs or capital goods by debiting the CENVAT Credit or otherwise, but the manufacturer can take the CENVAT Credit again when the inputs or capital goods are received back in his factory. (b) The CENVAT Credit shall be allowed in respect of jigs, fixtures, moulds and dies sent by a manufacturer of final products to a job work....
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.... anti-biotic, precisely the inputs used by him is HMDS while processing such inputs, the appellant not only gets the final product, the anti biotic but also gets a by-product / waste called HMDSO. 9. There is no denial to the fact that it is the by-product / waste (HMDSO) which has emerged with the final product (anti-biotic/ organic compound ) of the appellant from the inputs HMDS is sent to the job worker for the reason that this by-product has a potential of releasing the inputs i.e. HMDS by further recovery process as 75% of such HMDS is still contained in the said by-product i.e. HMDSO. 10. This perusal, to my opinion, is sufficient to hold that Rule 4(5) of Cenvat Credit Rules is not applicable to the given facts and circumstances. ....
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....) has rejected the appeal solely on the ground that Rule 4(5) does not differentiate between product and by-product. The findings are apparently wrong on the face of it. In view of the above quoted provision itself, it is clear that Rule 4(5) apparently talks about the inputs as such or about partially processed inputs being sent to the job worker that too at a stage, prior to manufacture of final product from the input. Admittedly and apparently same is not the fact in the present case. The findings of the Commissioner (Appeals) are, therefore, not sustainable. Also the findings are liable to be set aside due to catena of judgments about a by-product emerging inevitably at the time of manufacture of final product, to be out of scope of any....