9911796707
TMI Blog2012 (10) TMI 141X X X X Extracts X X X X X X X X Extracts X X X X ..... f exempted products and only subsequently the appellants started manufacture of ammonia for supply in the market on payment of Central Excise duty. In addition, the proceedings were initiated for denial of Rs.8,64,004/- on the ground that the appellant has taken the credit twice on the basis of same document. In the impugned order, the CENVAT Credit availed has been demanded with interest and penalty equal to the wrongly availed CENVAT Credit has also been imposed. 2. Ld.Counsel on behalf of the appellant submitted that it is not correct to say that the capital goods on which credit has been claimed, were used in the manufacture of exempted product (Ammonia) exclusively. The appellants were selling carbon dioxide which was a by-product on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... le High Court of Karnataka considered this issue. In that case, the assessee was engaged in the manufacture of refined vegetable oil and vanaspati by processing the crude oil and palm oil. In that case also, the assessee was paying the duty on the by-product but not the final product which was vanaspati. The Hon'ble High Court held that it cannot be said that no by-product is emerges when the process is conducted in new machinery and on that ground the benefit was allowed. In our view, this decision of Hon'ble High Court of Karnataka supports the case of the appellant. 6. In this case, there is no dispute that the machinery was used in the manufacture of ammonia and carbon dioxide emerged during the course of manufacture of ammonia and the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... S + ZnO --> ZnS + H2O Pre-reforming/Primary Reforming: * Naptha feed is pre-reformed in pre-reformer unit to convert in to methane, hydrogen, CO and CO2 before further reforming in primary reformer. * Catalytic steam reforming of the Sulphur-free feedstock (gas + from pre-reformer) is then used to form hydrogen plus carbon monoxide, carbon dioxide etc: CH4 + H2O --> 3H2 + CO2 Secondary Reforming: * The primary reformer outlet gases are further reformed in Secondary Reformer, where stoichimetric quantity of air is introduced to maintain nitrogen in syn. Make up gas. Shift Conversion: * The next step then uses catalytic shift conversion to convert the carbon monoxide to carbon di ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to Superintendent, wherein they have stated that they came across total double credit of Rs.59,43,067/-. This fact, in our opinion, should go in favour of the appellant to hold that no penalty is imposable. Accordingly, we consider it appropriate that no penalty is imposable on the appellant. 10. In view of the above discussion, the demand for CENVAT Credit availed on the capital goods cannot be sustained and therefore the demand has to be set aside and the penalties also would automatically get set aside. 11. As regards double entry, the appellants have not disputed and, in fact, have found much more double entries and have reversed them voluntarily. Under these circumstances, the penalty for availment of credit twice also ..... X X X X Extracts X X X X X X X X Extracts X X X X
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