9911796707
TMI Blog2015 (4) TMI 1035X X X X Extracts X X X X X X X X Extracts X X X X ..... appellant was availing the benefit of CENVAT credit on various chemicals such as formaldehyde, caustic soda, Formic Acid, Resins etc. under the CENVAT Credit Rules, 2004. Saw Dust is generated during the manufacturing process of particle board and pre-laminated board. The manufacturing process involves chipping wooden waste/wooden blades/poles in chipper chipper machine. Then core and face chips are dried and stored in the Core and Face Bunkers. These chips are poured from Bunkers to Glue Mixer and mixed with synthetic resin, i.e. an aqueous chemical solution of phenol formaldehyde resin (44/45%) or solution of urea formaldehyde resins (55%) or solution of melamine Urea Formaldehyde Resin, as the case may be. The glued chips are form ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the CENVAT Credit Rules, 2002 read with Rule 6(3) of the CENVAT Credit Rules, 2004, where the manufacturer availing CENVAT credit in respect of any inputs, except inputs intended to be used as fuel in the manufacture of such final products which are chargeable to duty as well as in the exempted goods, then the manufacturer shall maintain separate accounts for the receipt, consumption and inventory of inputs meant for use in the manufacture of dutiable final products and the quantity of inputs meant for using in the manufacture of exempted goods and take CENVAT credit on that quantity of inputs which is intended for use in the manufacture of dutiable goods. Accordingly, the revenue felt that the appellant was required to pay du ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... enerated. Accordingly the proposed demand was confirmed Rs. 13,04,746/- along with interest and also equal amount of penalty was imposed under section 11AC of the Act read with Rule 13 of CENVAT Credit Rules, 2002 and Rule 15 of CENVAT Credit Rules, 2004 read with Rule 25 of the Central Excise Rules, 2002. 4. Being aggrieved the appellant preferred appeal before the Commissioner (Appeals), who by the impugned order, dismissed the appeal against the order of the Joint Commissioner. The Commissioner (appeals) held that the appellant manufactured both dutiable and exempted goods (saw dust) and the availment of CENVAT credit in regard to common inputs has to be governed by Rule 6(3) of CENVAT Credit Rules, 2004. As the appellant did not ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er Bench committed a fundamental error in holding that HCL was not an input required in the manufacture of gelatin because, firstly that was not the question referred to it for the decision. Secondly the specific case of the Revenue as set out in the show-cause notice was that HCL was the common input used in the manufacture of two final products namely gelatin and phosphoryl 'A' and 'B' and since phophoryl 'A' and 'B' is exempted, Rule 57 CC is applicable. Therefore the finding given by Larger Bench that HCL was not an input required in the manufcture of gelatin is beyond the scope of reference and contrary to the facts of the case on record. The Honble High Court also took notice of the ruling of the Honble Apex Court in the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s is that where MODVAT input is used in the manufacture of dutiable final product and waste, refuse or by-product arise in the process, then, even if the MODVAT inputs are contained in the waste, refuse or by-product and whether or not Excise duty is payable on such waste, refuse or by-product, the manufacturer would not be denied full credit of duty paid on inputs used in the manufacture of dutiable final products. Rule 57CC applies only if the MODVAT inputs are used in manufacture of both dutiable final products and exempted final products and the manufacturer has not maintained separate accounts so as to ascertain the quantum of inputs used in the manufacture of the final products. Therefore the floor sweepings/waste and scrap/hydrogen a ..... X X X X Extracts X X X X X X X X Extracts X X X X
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