AI OCR 
TaxTMI 
TaxTMI 
TaxTMI 
2025 (1) TMI 5
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....etc. The appellant have availed benefit of Cenvat credit of the duty paid on the Copper Concentrate, Refrigerant gas used in the manufacture of oxygen and Vanadium Pentoxide used as catalyst for conversion of Sulphur Dioxide to Sulphur Trioxide. Further sulphuric acid is manufactured by the appellant from the Sulphur dioxide gases emanating during the smelting of the Copper concentrate. It is matter of record that Copper concentrate Catalyst and Oxygen are the common inputs used for manufacture of goods cleared on payment of duty such as Copper Cathodes, Continuous Cast Copper rods, Sulphuric Acid etc as well as in the manufacture of exempted goods. The department is of the view that certain inputs like Business Auxiliary Service, Business Support Service, Cargo Handling service, C&F Agent service, Customs House Agent services, General Insurance services, Manpower Recruitment or Supply Agency Service, Transport of goods by Road services, Works Contract services etc. are also common services for manufacture of both Copper products as well as Di-ammonium Phosphate (DAP). The department on the basis of above contention that certain inputs as well as input services have been used for e....
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.... terms of Rule 3 of the Central Excise (Removal of Goods at Concessional Rate of Duty for Manufacture of Excisable Goods) Rules, 2001 read with Sr. 128 of Notification No. 12/2012-CE dated 17.03.2012; and (c) captively consumed in the manufacture of phosphoric acid at Phosphoric Acid Plant within the factory. Thus it can be seen from the above that a part of Sulphuric acid arising in the sulphuric acid plant is used for manufacturing Phosphoric acid. In Phosphoric Acid Plant the Sulphuric acid is reacted with rock phosphate to get Phosphoric acid. The Phosphoric acid which emerges from the above plant is captively consumed in Di-ammonium Phosphate Plant. Phosphoric acid is reacted with ammonia to get the Di-Ammonium Phosphate (DAP for short). He submits that the appellant have cleared DAP as a fertilizer classified under Central Excise Tariff sub heading 3105 3000 on payment of duty at the rate of 1% ad valorem in terms of Serial No. 128 of Notification No. 12/2012-CE dated 17.03.2012. 2.2 The learned advocate has further submitted that appellant have been issued various show cause notices proposing to demand reversal of 5%/ 6%/ 8%/ 10% as applicable during the relev....
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....d in the manufacture of oxygen gas The show cause notice dated 01.05.2015 and 14.09.2016 which are mentioned at serial No. 1 at the table above also alleged that he appellant have availed Cenvat credit on common input service like Business Auxiliary Service, Business Support Service, CHA service, C&F Agent service, General Insurance services, Manpower Recruitment or Supply Agency Service, Works Contract services etc. for both for manufacture of excisable as well as exempted goods. 2.3 It is relevant to mention here that the learned Adjudicating Authority i.e. Commissioner of Central Excise, Bharuch vide order-in-original BHR- EXCUS-000-COM-001-024-16-17 dated 27.05.2016 dropped the proceedings initiated in the show cause notices demanding reversal under Rule 6(3)(i) of Cenvat Credit Rules, 2004 in relation to clearance of sulphuric acid, covering the period up to July 2015. The learned Adjudicating Authority while deciding various show cause notices by order dated 27.05.2016 has relied upon the judgment of Hon'ble Supreme Court in the appellant's own case reported in 2014 (303) ELT 321 (SC). 2.4 Learned advocate has submitted that learned Commissioner vide the impugned ord....
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....consideration within the ambit of "exempted goods" for the purpose of Rule 6. However, the goods in question is DAP, which is specified in the Central Excise Tariff and even subjected to excise duty when not cleared to fertilizer manufacturers. Therefore, the same cannot be called "non- excisable goods". The Explanation to Rule 6 relied upon by the Department is irrelevant in the present case. The relevant Explanation is extracted below:- "Rule 6. Obligation of a manufacturer or producer of final products and a provider of output service - (1) The CENVAT credit shall not be allowed on such quantity of input used in or in relation to the manufacture of exempted goods or for provision of exempted services, or input service used in or in relation to the manufacture of exempted goods and their clearance upto the place of removal or for provision of exempted services, except in the circumstances mentioned in sub-rule (2): Provided that the CENVAT credit on inputs shall not be denied to job worker referred to in rule 12AA of the Central Excise Rules, 2002 on the ground that the said inputs are used in the manufacture of goods cleared without payment of duty under the pr....
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....Sulphur Dioxide gases emanating during the smelting of the Copper Concentrate. It therefore, appears that Copper Concentrate catalyst and Oxygen are the common inputs used for the manufacture of the goods cleared on payment of duty such as Copper Cathodes, Continuous Cast Copper Rods, Sulphuric Acid etc., as well as in the manufacture of exempted goods. Further it also appears that certain inputs services like Business Auxiliary Services, Business Support services, Cargo Handling services, Clearing and Forwarding agent services, Courier, Customs House Agent services, General Insurance services, Manpower Recruitment and Supply agent services, Transport of goods by road, Works Contract services etc. are also common for manufacture of both Copper Products as well as DAP. 8. The assessee has contended that Sulphuric Acid is an unintended by-product, However, it appears that manufacture of DAP from Sulphuric Acid is Excisable product for which assessee has made conscious effort. From the records, it is quite clear that the process of smelting of copper core for manufacture of copper concentrate and Copper rods does not have any relationship to the manufacture of DAP. Manufactur....
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....ncentrate catalyst and Oxygen are the common inputs used for the manufacture of the goods cleared on payment; of duty such as Copper Cathodes, Continuous Cast Copper Rods, Sulphuric Acid etc., as well as in the manufacture of exempted foods. I find that certain inputs services like Business Auxiliary Services, Business Support Services, Cargo Handling Services, Clearing and Forwarding Agent Services, Courier, Customs House Agent services, General Insurance services, Manpower Recruitment & Supply Agency services, Transport of goods by road (GTA), Works Contract services etc. are also common services for manufacture of both Copper Products as well as DAP. The assessee has contended that Sulphuric Acid is an unintended by-product, however, it appeared that manufacture of DAP from Sulphuric Acid is excisable product for which assessee has made conscious effort. From the records, it is quite clear that the process of smelting of copper core for manufacture of copper concentrate and Copper rods does not have any relationship to the manufacture of DAP. Manufacture of DAP is having totally different facility and is not even remotely connected to the manufacture of Copper concentra....
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....he appellant by using phosphoric acid and in-house manufacturing of the sulphuric has been obtained by processing sulphuric acid. It is an accepted fact that sulphuric acid is unintended product which emerges during the process of copper concentrate while manufacturing various types of copper products. This Tribunal in the appellant's own case, vide final order No. 12425-12427/2023 dated 02.11.2023 reported under -2023 (11) TMI 1070 -CESTAT Ahmedabad has held as follows:- "11. We have carefully considered the submissions made by both the sides and perused the records. We find that in the present disputed matter department has relied upon Explanation (1) introduced w.e.f. 01.03.2015 and Board circular dtd. 25.04.2016 to demand the amount in terms of Rule 6(3) of Cenvat Credit Rules, 2004. Whereas the main argument of the appellant with regard to the challenge of the Circular dated 25-4- 2016 is that despite the insertion of Explanation 1 with effect from 1-3-2015, the Legislature has not removed the basis on which the judgment of the Hon'ble Supreme Court was pronounced, and therefore despite the amendment treating certain non- excisable goods as exempted goods or final pro....
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....onsideration from the factory. Explanation 2. - Value of non-excisable goods for the purposes of this rule, shall be the invoice value and where such invoice value is not available, such value shall be determined by using reasonable means consistent with the principles of valuation contained in the Excise Act and the rules made thereunder." 13. A perusal of Rule 6(1) clearly shows that the manufacturer has to manufacture dutiable goods as well as exempted goods. It has to be seen that though the said explanation puts forward a deeming provision that non-excisable goods cleared on payment of consideration are also to be considered as exempted goods, there is no corresponding amendment made in sub-rule (1) of Rule 6 so that the goods that emerged out of process of manufacture falling in clause (1) are also to be considered as exempted goods. As per the settled decisions, the disputed goods which are not consciously manufactured by the appellant and which emerged unavoidably in the process of manufacture of other goods cannot be considered as goods manufactured by the appellant. Since disputed goods is not manufactured goods but the by-product which emerges/comes int....