2022 (11) TMI 923

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....(iii) of CENVAT Credit Rules, 2004 was excluded from computation of eligible balance, has, according to Learned Counsel for appellant, been improperly denied to them as is evident from the decision of the Hon'ble High Court of Gujarat in Principal Commissioner of Central GST and Central Excise v. Reliance Industries Ltd [R/Tax appeal no. 219 of 2022 in order dated 5th May 2022] upholding the order of the Tribunal in Commissioner of Central Excise & Service Tax, Rajkot v. Reliance Industries Ltd [final order no. A/12439-12440/2021 dated 11th October 2021 disposing of appeals of Revenue against order-in-appeal no. RAJ-EXCUS-000-APP-132-133-2019 dated 27th June 2019 of Commissioner (Appeals) Commissioner of Central Excise, Customs and Service Tax, Rajkot] and in Commissioner of Central Excise & Service Tax v. Reliance Industries [final order no. A/1268- 12630/2021 dated 20th December 2021 disposing off appeal no. E/11695/2017 against order-in-appeal no. SK-20-22-LTU-MUM- 1017-18 dated 8th June 2017 of Commissioner of Central Excise, Customs and Service Tax (Appeals), Mumbai - I. 3. We have heard Learned Authorised Representative. 4. The appellant is a manufacturer of excisable good....

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....e demineralised bones are hydraulically transported to the washing section and thereafter processed further to manufacture Gelatin. The above manufacturing process shows that while soaking the bone chips in Hydrochloric Acid a waste product, viz., Mother Liquor ipso facto comes into existence. It is not as if there is a deliberate attempt on the part of the manufacturer to manufacture the Mother Liquor which emerges as a byproduct during the course of manufacture of Gelatin. Moreover, it is not as if a particular quantity of Hydrochloric acid is used for the manufacture of Gelatin and a particular quantity is used for the production of Mother Liquor (whether ascertainable or unascertainable), the entire quantity of Hydrochloric acid in respect of which cenvat credit is availed of is used by the respondent for the manufacture of Gelatin. Considering the process of manufacture adopted by the respondent, it is not possible to manufacture Gelatin without corresponding production of Mother Liquor. This Mother Liquor which otherwise is in the nature of a waste product, is used by the respondent assessee for the manufacture of Di-Calcium Phosphate. ........................ 8. Thus, ....

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.... has been used in or in relation to manufacture of Mother Liquor, the identical quantity of the same goods has simultaneously been used in the manufacture of Gelatin. The emergence of Mother Liquor during the course of manufacture of Gelatin, therefore, by itself is not a ground to invoke the provisions of Rule 6 of the Rules. ......................... 12. On behalf of the appellant it has been submitted that common input Hydrochloric Acid was used in the manufacture of both Gelatin as well as Di-Calcium Phosphate hence, in the light of the provisions of Rule 6(2) of the Cenvat Credit Rules, 2002, the respondent was required to maintain separate accounts for receipt, consumption and inventory of input meant for use in the manufacture of dutiable final products and the quantity of input meant for use in the manufacture of exempted products and take cenvat credit only on that quantity of input which was intended for use in the manufacture of dutiable goods. In the present case, the assessee has taken cenvat credit only on that quantity of input, which was intended for use in the manufacture of dutiable goods, therefore, also the question of invoking sub-rule (2) of Rule 6 of th....

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....dered by Hon'ble Supreme Court in the case of National Organic Chemical Industries Limited-2008 (232) ELT 193 (S.C), in that case exemption under notification No. 217/86-CE dated 02.04.1986 was available to ethylene and propylene (falling under chapter 29) when captively used in the process cracking raw naphtha for the manufacture of ethylene and propylene. In the process cracking methane and ethane falling under chapter 27 also manufactured. As per the said notification such exemption was not available to ethylene and propylene used in the manufacture of goods falling under chapter 27 namely methane and ethane. In other words excise duty was to be paid for such quantity of ethylene and propylene inputs which captively consumed and used in the manufacture of product falling under chapter 27 namely methane and ethane. The Hon‟ble Supreme Court held that the emergence of ethane and methane in the process of manufacturing ethylene and propylene was inevitable therefore no ground for denying the exemption. It was held that the assessee could not have manufactured ethylene and propylene without manufacturing ethane and methane and in any technology the emergence of ethane and meth....