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2007 (4) TMI 19

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..... o to the credit adjustment part of Rule 57P - Central Excise Reference No. 52 of 1995 - - - Dated:- 30-4-2007 - [Order per] - We have heard learned Counsel for the assessee at length. 2. The following two questions have been referred in this reference : "(i) Whether in the facts and circumstances of the case, the Tribunal was correct in law in holding that Solvent 75 is not a waste or by .....

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..... er higher alcohol, aldehyde and water. Whenever required these are esterified. This residue is called product to be burnt. This mixture of heavy product and products to be burnt is called Solvent 75 4. Under Notification 231/87 issued under Rule 57K of the Central Excise Rules, money credit is available of duty paid on Ethyl Alcohol (i.e. raw material) towards duty payable on various final pro .....

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..... that Solvent 75, which has a market value as a manufactured product, cannot be said to be a waste product. The surviving question is, whether it is a "by-product" or it is not a "by-product". Normally, a "by product" is a product, which is obtained midway during the process of manufacture of the main product. It would remain a "by-product" even if the product so obtained midway is required to unde .....

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..... circumstances, our answer to the first question is that the Tribunal was correct in law in holding that Solvent 75 on the facts and circumstances was not a waste or a "by-product". 8. The Second Question Rule 57P of the Central Excise Rules, 1944 deals with disallowing of credit on inputs, if the credit has been taken wrongly, and provides for consequent adjustment of the wrongly taken credit. .....

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..... because under Rule 57P, if credit adjustment is not possible for any reason the cash recovery has been permitted, therefore, the provisions of Section 11A should be held to apply not only to the cash recovery part but also to the credit adjustment part of Rule 57P. We are unable to agree. The cash recovery is of credit on inputs wrongly taken and is not recovery in respect of (1) non-levied or (2 .....

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