2008 (7) TMI 317

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....ed SDR for the Revenue. We have heard both the sides. 3. The appellants are manufacturers of sugar and also ethyl alcohol. They were taking Cenvat credit of duty paid on excisable goods used as inputs in the manufacture of the respective final products The inputs are Caustic Soda Flakes, Indion 220NA, Magu Floc-27, Phosphoric Acid, Mazwap-900 and Mazu-400. They were availing the duty paid on these inputs as Cenvat credit; and utilizing the duty payment on their final products which are Sugar, Molasses, Denatured Spirit and Fusel Oil. Further the appellants are also generating bio-earth/ bio-compost, classifiable under Chapter 2301 attracting Nil rate of duty by using the following materials :- (i) Press mud : Waste; material arising durin....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....emanded under Rule 12 of the Cenvat Credit Rules, 2002 and Rule 14 of, Cenvat Credit Rules, 2004 read with 11AB of the Central Excise Act, 1944. A mandatory penalty equal to the amount demanded was also imposed under Rule 13 Cenvat Credit Rules, 2002 and Rule 15 of Cenvat Credit Rules, 2004 read with Section. 11 AC of Central Excise Act, 1944 for contravention of Rule 6(3)(b) Cenvat Credit Rule 2002/2004. The appellants approached the Commissioner (Appeals) for relief. The Commissioner (Appeals) relied on the decision of the Larger Bench in the case of Rallies India Ltd. v. Commissioner of Central Excise, Salem reported in 2007 (208) E.L.T. 25 (Tri. - L.B.) which held that there should not be any distinction between intended final product a....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....stwhile Central Excise Rules, 1944 - Rule 57D ibid - Rule 6 of Cenvat Credit Rules, 2004. (ii) The Hon'ble CESTAT, Bangalore in the case of M/s. J.S.W. Steel Ltd. v. Commissioner of Central Excise, Belgaum reported in 2006 (204) E.L.T. 313 (Tri. -Bang) = 2006 (4) S.T.R 481 (Tribunal) held that demand - Cenvat/Modvat - By-product - Corex gas arises as a technological necessity during manufacture of hot rolled coils - Ministry of Environment & Forests also treated corex gas as an off gas and as an environmental hazard - Provisions of Rule 57CC of erstwhile Central Excise Rules, 1944 read with Rule 6(3) of Cenvat Credit Rules 2002 not invocable for demanding 8% of amount equivalent to price of final product - Rule 6 of Cenvat Credit Rules, 20....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

.... Ltd. v. Commissioner of Central Excise, the Tribunal had held that where any waste products are obtained which are used for further manufacture of exempted goods, the requirement of reversal of Cenvat credit under Rule 57CC would not arise. These two decisions are more appropriate in the present case as Bio-earth/Bio-compost are not offered for sale but are cleared as free issue items to the farmers for re-strengthening their land. The provisions of Rule 57CC (now Rule 6) do not apply to the facts and circumstances of the case as the goods are neither exempted nor attracting Nil rate of duty. These are offered for nominal cost to the farmers for application on their fields. Hence, it is not a case of usage of common inputs in the manufactu....