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2023 (8) TMI 121 - HC - Central ExciseRefund claim - payment of amount equivalent to the CENVATE credit attributable to inputs and input services used in relation to the manufacture of exempted clearance of petroleum product namely Liquefied Petroleum Gas (LPG) - refund sanctioning authority took the view that the amount was rightly paid and the refund was not liable to be granted - HELD THAT - In the case of THE PRINCIPAL COMMISSIONER, CENTRAL GST AND CENTRAL EXCISE VERSUS M/S. RELIANCE INDUSTRIES LTD. 2022 (5) TMI 650 - GUJARAT HIGH COURT , the Division Bench of this court held that the question whether the LPG is by-product or not, has come an academic issue in view of the decisions of the supreme court in COMMISSIONER OF CENTRAL EXCISE, MUMBAI VERSUS M/S NATIONAL ORGANIC CHEMICAL INDUSTRIES LIMITED 2008 (11) TMI 6 - SUPREME COURT and SWADESHI POLYTEX LTD. VERSUS COLLECTOR OF C. EX. 1989 (11) TMI 131 - SUPREME COURT . Learned advocate for the appellant when confronted with the decision of the Division Bench of this court in M/S. RELIANCE INDUSTRIES LTD. involving the same issue and questions, was entirely at his receiving end and was not in a position to dispute the position of law emerging from the said decision, which holds the field. Thus, no question of law much less any substantial question of law can be said to be arising. The proposed substantial questions of law are already considered, decided and answered - appeal dismissed.
Issues Involved:
1. Applicability of Rule 6 of the CENVAT Credit Rules, 2004 to exempted clearance of LPG. 2. Refund eligibility under Rule 6(3) of CENVAT Credit Rules, 2004 for LPG cleared under exemption. 3. Consideration of LPG as a byproduct or joint product in the context of Rule 6 of CENVAT Credit Rules, 2004. Summary: Issue 1: Applicability of Rule 6 of the CENVAT Credit Rules, 2004 to exempted clearance of LPG The appellant argued that the Tribunal erred in law by not taking cognizance of Rule 6 of the CENVAT Credit Rules, 2004, which pertains to the admissibility of CENVAT Credit for exempted clearance of LPG. The Tribunal's decision was challenged for holding that Rule 6 did not apply to LPG produced as a joint product with other dutiable petroleum products by chemical reaction/fraction of a common blend of raw material. Issue 2: Refund eligibility under Rule 6(3) of CENVAT Credit Rules, 2004 for LPG cleared under exemption The respondent initially paid an amount equivalent to the CENVAT credit attributable to inputs and input services used for the manufacture of exempted LPG. They later sought a refund of Rs. 3,97,18,590/-, which was rejected by the refund sanctioning authority and subsequently by the Commissioner of Central Excise and Service Tax, Mumbai. However, the Commissioner of Central Excise (Appeals) allowed the appeal, stating that the respondent was not required to pay any amount under Rule 6 for the credit of duty availed on inputs and input services attributed to the manufacture of exempted LPG. Issue 3: Consideration of LPG as a byproduct or joint product in the context of Rule 6 of CENVAT Credit Rules, 2004 The appellant contended that the Tribunal wrongly allowed the respondent's new grounds that LPG is a byproduct and thus Rule 6 does not apply. The Tribunal's decision was challenged for holding that LPG is a byproduct of the petroleum refinery and not a joint product with other petroleum products. The court referred to previous judgments, including the Division Bench's decision in Tax Appeal No. 219 of 2022, which had addressed similar issues and concluded that the question of whether LPG is a byproduct or not had become academic due to the Supreme Court's decisions in CCE vs. National Organic Chemical Industries Limited and Swadeshi Polytex Ltd. vs. CCE. Conclusion: The court found no substantial question of law arising from the appeal, as the issues and questions had already been considered and answered in previous judgments. Consequently, the appeal was dismissed as meritless, and the challenge to the order of the Central Excise and Service Tax Tribunal failed.
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