2008 (6) TMI 384 - AT - Central Excise

Summary

Issues involved: Duty liability on Spent Nickel Catalyst and Denatorium Saccharide.

Issue 1: Duty liability on Spent Nickel Catalyst

The appeal was filed by the Revenue against the Order-in-Appeal, with the respondents also filing Cross Objection. Despite the absence of representation from the respondents, the appeal was taken up for disposal due to the narrow compass of the issue. The main issue revolved around the duty liability on the Spent Nickel Catalyst arising during the manufacturing of final products. The respondents claimed it as not excisable. The ld. Commissioner (Appeals) rejected the Department's appeal and allowed the respondents' appeal based on the absence of a specific tariff entry for waste arising in the course of manufacture, making it not dutiable. Citing Supreme Court judgments, it was established that the Spent Nickel Catalyst is waste, not a finished product, and therefore not subject to duty liability. The appeal filed by the Revenue was rejected, and the Cross Objection by the respondents was disposed of.

Issue 2: Denatorium Saccharide

Regarding Denatorium Saccharide, it was sent to a distillery unit to denature Ethyl Alcohol, an input for the appellant. Although not directly used in the final product's manufacture, it was utilized to denature Ethyl Alcohol entirely. Rule 57D(2) allows Modvat credit on inputs even if used through an intermediate product that may not be excisable. The Commissioner (Appeals) Central Excise & Customs, Mumbai VII had previously allowed this in a similar case. The appellate authority correctly followed the law as laid down by the Tribunal in the respondent's own case, leading to the rejection of the Revenue's appeal and the disposal of the respondents' Cross Objection.