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TMI Blog2010 (2) TMI 396X X X X Extracts X X X X X X X X Extracts X X X X ..... f SS flats which go into manufacture of exempted SS scrap and therefore, they are required to pay the amounts in terms of Rule 6(3)(b) of Cenvat Credit Rules, 2004. Accordingly, he confirmed the duty and interest and imposed penalties. The orders of the original authority stand upheld by the Commissioner (Appeals). Held that- Waste and the scrap have arisen in an integrated process and the entire inputs of SS flats stands utilised for the purpose of manufacture of SS cold rolled patta/patti. This fact is not in dispute. The scrap has arisen only as a by-product. The ratio of the decision of the Tribunal in the case of Narmada Gelatines Limited and the decision of the Hon’ble Bombay High Court in the case of Rallis India Limited will apply t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lling machine. After the process of hot rolling, they are subject to a process known as pickling that is dipping the product in a mixture containing different acids such as sulphuric acid, nitric acid hydrochloric acid and water with a view to remove the extra carbon deposit. The said hot rolling process may be repeated when thinner cages of the end-product is required. The said hot rolling products are further subject to cold rolling by passing them through rollers to obtain patta/patti of the desired thickness. The cold rolled products are also subject to pickling but using different combination of pickling mixture. The final product arising out of cold rolled processes require to be trimmed by cutting rough edges. In the entire process o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re used fully in connection with the manufacture of SS cold rolled products and the arising of scrap is incidental to the manufacture of SS cold patta/patti. No amount of SS flats can be attributed as exclusive inputs meant for the manufacture of the scrap which arises as a by-product unintentionally. He relies on the various decisions particularly the decision of the Hon'ble High Court of Bombay in the case of Rallis India Ltd. v. UOI reported in 2009 (233) E.L.T. 301 (Bom.); the decision of the Tribunal in the case of Assistant Commissioner of Customs C.Ex., Vishakhapatnam v. Hygrade Pallet Ltd. reported in 2010 (249) E.L.T. 266 and the decision of the Tribunal in the case of Narmada Gelatines Limited v. CCE, Bhopal reported in 2009 (23 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the case of Narmada Gelatines Limited and it was held that when the entire material stands utilised in the manufacture of dutiable final product, the question of denying credit attributable to notionally arrived credit for the inputs going into the exempted by-product does not arise. The relevant portion of the order is reproduced below : "9. In view of the above, we hold that the entire hydrochloric acid stands used in the composite process at the initial stage and therefore, it cannot be denied that the entire quantity is used in relation to the manufacture of the dutiable products; it is not possible to use lesser quantity of hydrochloric acid to obtain the same quantity of gelatine; the product DCP, EDCP which arise out of treatment o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Larger Bench has also recorded a finding to the effect that HCL was not a necessary input required in the manufacture of gelatin. …………… 27. The fact that the waste mother liquor arising in the manufacture of gelatin was further processed to manufacture exempted phosphoryl 'A' and 'B' would not attract Rule 57CC, because, if Rule 57CC was not applicable at the time of clearance of the waste mother liquor arising in the manufacture of dutiable gelatin, then the said rule cannot be applied merely because mother liquor was further processed to manufacture exempted final product, namely, phosphoryl 'A' and 'B'. In other words, liability to pay the presumptive amount under Rule 57CC would arise only if the waste mother liquor is held to be a ..... X X X X Extracts X X X X X X X X Extracts X X X X
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