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2015 (9) TMI 520 - HC - Central ExciseCenvat Credit - Final product being Spent Sulphuric Acid was cleared at nil rate of duty - in the nature of by-product or waste - Held that - Spent Sulphuric Acid is not a final product, as has been held in the decision of the Supreme Court and assuming it is a waste, refuse or by-product, it is chargeable to nil rate of duty - cenvat credit cannot be denied - Decision in the case of Hindustan Zinc Ltd. 2014 (5) TMI 253 - SUPREME COURT followed. - Decided against the revenue.
Issues:
Whether the assessee is entitled to the credit of duty taken on the inputs when the final product was cleared at nil rate of duty. Analysis: The High Court considered the issue of whether the assessee is entitled to the credit of duty on inputs when the final product was cleared at nil rate of duty. The Court referred to a previous order in C.M.A.No.285 of 2007, where it followed the decision of the Supreme Court in the case of Union of India v. Hindustan Zinc Ltd. The Supreme Court's decision clarified that sulphuric acid, considered a by-product, should not be denied credit under Rule 57D. The Court emphasized that Rule 57D allows for credit even if the by-product is exempt from duty or charged at nil rate. The Court noted that part of the spent sulphuric acid was cleared at nil rate of duty, and Rule 57D applied in this scenario. Additionally, the Court highlighted that the spent sulphuric acid was a by-product in the manufacture of the final product, Acid Slurry, and was cleared under specific notifications. Consequently, the Court upheld the order of the Commissioner (Appeals) and the Tribunal based on the Supreme Court's decision. In conclusion, the High Court dismissed the appeals, ruling in favor of the assessee and against the Revenue based on the principles outlined in the Supreme Court's judgment. The Court emphasized the application of Rule 57D in allowing credit for duty on inputs, especially in cases where the final product is cleared at nil rate of duty. The judgment reaffirmed the position that spent sulphuric acid, as a by-product, should not be denied credit, aligning with the interpretation provided by the Supreme Court.
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