9911796707
TMI Blog2007 (2) TMI 384X X X X Extracts X X X X X X X X Extracts X X X X ..... mpted and non-exempted final products were not maintained. 2. The appellant was availing Cenvat credit facility on the different chemicals used in the manufacture of refined edible oil. The appellant was engaged in the manufacture of refined edible oil from the seeds/oiled cakes by solvent extraction method during which process solvent extracted oil and de-oiled cake were produced. The solvent extracted oil was further used in the refinery to get refined edible oil, which was a dutiable item. During the process of refining, various input chemicals such as, phosphoric acid, caustic soda, sulphuric acid etc. were used and Cenvat credit was taken in respect of these inputs. In the process of manufacturing refined oil, other excisable goods s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ions of Rule 6(2) of the Cenvat Credit Rules, 2002, an amount equal to 8% of the total price of the exempted final product became payable under Rule 6(3)(b) of the said Rules. 5. The learned counsel appearing for the appellant submitted that, on a proper construction of Rules 6(2) and 6(3) of the said Rules, it should have been held by the authorities below that since the appellant was manufacturing refined edible oil, the inputs were meant for use in the manufacture of such edible final product and they were not meant for use in the manufacture of exempted goods, the mere fact that the exempted goods came to be incidentally manufactured, will not alter the fact that the inputs were meant for use in the manufacture of the dutiable final p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... idified with phosphoric acid and neutralized with sodium hydroxide and washed thoroughly in high speed mixers and vacuum dried. In the process of neutralization, soap stock was separated and it was then acidulated to recover acid oil as a by-product. Therefore, admittedly acid oil was a by-product, which was regularly manufactured while manufacturing the refined oil. In Rallies India Ltd. (supra), the Larger Bench, while referring to the product phosphoryl A and B which was consciously manufactured, held in para 9 of the judgment that their emergence was to be treated as a result of intended manufacture and not an unwanted product. In the present case, acid oil has not been described as an unwanted product. Its production was a re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... regularly from time to time, as having been manufactured as a result of intended manufacture. It, therefore, appears that the authorities below have correctly invoked the provisions of Rule 6(3)(b) against the appellant for ordering the impugned recovery. The penalty of Rs. 10,000/- is imposed under Rule 13(1) of the Cenvat Credit Rules, 2002. As can be seen from Rule 13(1), the minimum penalty imposable is Rs. 10,000/- Rule 13(1) applies to cases where there may not be any intention to evade duty which is separately dealt with Rule 13(2) for the purpose of prescribing mere stringent penalty. 9. For the foregoing reasons, there is no warrant for interference with the impugned order and the appeal is dismissed. (Dictated and pronounced i ..... X X X X Extracts X X X X X X X X Extracts X X X X
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