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TMI Blog2009 (5) TMI 464X X X X Extracts X X X X X X X X Extracts X X X X ..... d are chargeable to ‘nil’ rate of duty. Held that- After purification, an Electrolysis process takes place and in the Electrolysis process Zinc is produced, which is the main product. That means, the Sulphuric Acid is used in the manufacture of Zinc. Zinc is a dutiable item and when the Zinc Sulphate is subjected to Electrolysis process, Sulphuric Acid is formed. This is actually a by-product. A part of it is cleared for use of fertilizer. Thus, it is clear that the department’s contention that Sulphuric Acid is used in the generation of Sulphuric Acid is not correct. Sulphuric Acid is captively consumed in the manufacture of Zinc, which is a dutiable item. Therefore, there is no substance in the denial of the benefit of Notification 67/95 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ric Acid are manufactured. Part of Sulphuric Acid so manufactured is captively consumed to convert Zinc Oxide to Zinc Sulphate, while remaining is cleared on sale either on payment of duty or without payment of duty for the manufacture of fertilizers under different exemption Notifications. The show cause notice has been issued on the ground that the appellant had manufactured Sulphuric Acid, the Sulphuric Acid has been captively consumed and the Benefit of Notification No. 67/95 is not available for the Sulphuric Acid captively used in the manufacture of the goods cleared without payment of duty under exemption. Since, the proviso to the said Notification clearly stipulates that the Notification shall not apply to inputs used in or in rela ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re to this notice shall not be demanded under proviso to Section 11A(1) of the Central Excise Act, 1944. (b) An amount of Rs.31,40,553/- (Rupees Thirty one lakh forty thousand five hundred and fifty three only) should not be imposed as penalty under Section 11AC of the Central Excise Act. (c) Interest at the appropriate rate should not be levied under Section 11AB of the Central Excise Act. 3.1 If Para 6 of the show cause notice is seen, it is very clearly shown that the duty amount is asked is only the duty payable on the sulphuric acid captively consumed in the manufacture of acid plant and cleared without the payment of duty for use in the manufacture of fertilizers. 4. The Adjudicating Authority in his Order-in-Origi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt case is the demand of excise duty of Rs.31,40,553/- (Rupees Thirty one lakh forty thousand five hundred and fifty three only) together with penalty and interest and taking a view that the respondents availed Cenvat Credit on the inputs that go into the manufacture of final products cleared at NCL rate of duty. He has given a detailed discussion on Rule 6(2) etc., whereas we do not find anything in the Order-in-Original or show cause notice with regard to Rule 6 of the Cenvat Credit Rules. The only issue involved is whether the Sulphuric Acid which is manufactured and captively consumed can be given the benefit of exemption Notification under 67/95. That is the only issue, which is raised in the show cause notice and which has been dealt ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... — SO 3 SO 3 + H 2 O — H 2 SO 4 Leaching plant: ZnO + H 2 SO 4 — ZnSO 4 + H 2 O Purification plant: Impurities like cobalt and nickel are removed. Zinc Electrolysis: ZnSO4 + H2O + Ze — Zn + H2SO4 + 1/2O2 Where Ze is for electrodes" 6.1 It can be seen that from the above that in the acid plant, Sulphuric Acid is manufactured. The formula of the Sulphuric Acid is H2S04. The Zinc concentrates namely the Zinc Oxide is treated with Sulphuric Acid and Zinc Sulphate is formed. That is done in the Leaching plant. After purification, an Electrolysis process takes place and in the Electrolysis process Zinc is produced, which is the main product. That means, the Sulphuric Acid is used in the manufacture of Zinc. Zinc is a dutiable item and ..... X X X X Extracts X X X X X X X X Extracts X X X X
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