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TMI Blog2014 (3) TMI 554X X X X Extracts X X X X X X X X Extracts X X X X ..... both dutiable and exempted products and also availing CENVAT credit on common input services without maintaining separate accounts. On a perusal of the records, we find that the appellant was engaged in the manufacture of various oleoresins (dutiable products). In the course of manufacture of capsicum (chilly) oleoresin, chilly seeds came to be segregated and these seeds were either disposed of as such or disposed of after powdering. A part of the seeds was fed into another process which resulted in the production of seed oil. Another commodity which came to be generated in the appellant's plant was spent chilly which was left behind upon purification of the oleoresin. According to the department, the chilly seeds, seed oil and spent chilly ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... learned counsel has relied on Rallis India Ltd. Vs. Union of India [2009 (233) E.L.T. 301 (Bom.)] and Commissioner Vs. Sterling Gelatin [2011 (270) E.L.T. 200 (Guj.)]. The decisions are to the effect that by-products emerging during the course of manufacture of final products would not come within the ambit of Rule 6 of the CCR 2004. 5. Per contra, the learned Additional Commissioner (AR) relies on the Jai Bhagwan Oil & Flour Mills Vs. Union of India [2009 (239) E.L.T. 401 (SC)] in support of his argument that the commodities generated in the appellant's factory in the course of manufacture of oleoresins are liable to be considered as excisable products like the final product itself. In the cited decision, oil cake which was generated in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as final products for purposes of Rule 6 of the CCR 2004. On the other hand, in an endeavour to offset the demand raised in the show-cause notice, they reversed proportionate CENVAT credit on input services used in, or in relation to, the manufacture of the said commodities and also paid interest thereon. They did so to claim the benefit of the decision in Chandrapur Magnetic Wires (supra). This action of the assessee tacitly amounted to acknowledgement of the fact that the said commodities were exempted final products. Insofar as their conduct of August 2011, we would not like to examine its effect on the present case at this stage. However, the above conduct of the assessee (reversal of proportionate CENVAT credit) is certainly inconsist ..... X X X X Extracts X X X X X X X X Extracts X X X X
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