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TMI Blog2007 (12) TMI 125X X X X Extracts X X X X X X X X Extracts X X X X ..... der per: P.C. Chacko, Member (J)]. -1 . This application filed by the Revenue (Appellant) is for stay of operation of the impugned order, wherein learned Commissioner (Appeals) set aside the order of the lower authority demanding an amount of over Rs. 47.00 lacs from the assessee under Rule 12 of the Cenvat Credit Rules, 2002 read with the proviso to Section 11A(1) of the Central Excise Act. The demand raised by the original authority was in terms of Rule 6(3)(b) of the Cenvat Credit Rules, 2002. Under that Rule, a manufacturer of dutiable and exempted final products, who had not maintained separate inventory in respect of inputs used in the manufacture of dutiable product and those used in the manufacture of the exempted product, was requ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ench in Rallies India Ltd.. v. CCE, Chennai [2007 (208) E.L.T. 25 (Tri.-LB)], wherein it was held even an un-intended by-product would qualify to be 'final product' for the purpose of Rule 57CC of the erstwhile Central Excise Rules, 1944 and that where such by-product was exempted from payment of duty while the main product was dutiable, the manufacturer was required to pay 8% of the price of the exempted product in the absence of separate inventory having been maintained in respect of inputs used in the manufacture of the exempted product and those used in the manufacture of the dutiable product. Relying on this decision, it is submitted by learned SDR that, as the assessee had admittedly not maintained separate accounts in respect of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is called "de-oiled cake". On these facts, it is clear that Hexane is common to the main product and the by-product. However, it is also a fact that the solvent is recovered and reused for refining fresh quantities of crude oil in the Solvent Extraction Plant. In the nature of this process, one cannot say as to how much quantity of Hexane was used for manufacturing refined vegetable oil and how much quantity used for manufacturing the by-product. In other words, maintenance of separate accounts with reference to dutiable and exempted products becomes impossible. This was, perhaps, the reason why the assessee chose not to maintain separate accounts. In other words, they did not opt to operate under Rule 6(2) of the Cenvat Credit Rules. But n ..... X X X X Extracts X X X X X X X X Extracts X X X X
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