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TMI Blog2014 (2) TMI 1321X X X X Extracts X X X X X X X X Extracts X X X X ..... d under such a situation, the High Court held that when the matter has been remanded back to the Adjudicating Authority to redetermine the credit in accordance with law there was no substantial question of law and accordingly dismissed the appeal of the Revenue. Appeal dismissed - decided against Revenue. - D.B. Central Excise Appeal No. 18 of 2010 - - - Dated:- 11-2-2014 - Ajay Rastogi and J.K. Ranka, JJ. Shri Anil Mehta, Counsel, for the Appellant. Shri Ankit Totuka, Counsel, for the Respondent. ORDER [Order per : J.K. Ranka, J.]. - By the Court : This Central Excise Appeal u/s 35G of the Central Excise Act, 1944 (for short, CE Act ) has been preferred by the appellant-Revenue assailing the order of Customs, Excise Service Tax Appellate Tribunal (for short, CESTAT ), dated 27-5-2008 passed in Excise Appeal No. 1920 of 2006 [2008 (232) E.L.T. 156 (Tribunal)]. 2. The brief facts, which are necessary for disposal of the instant appeal, are that the respondent-assessee is a unit manufacturing refined vegetable oil through solvent extraction method. During this process, De Oil Cake (D.O.C.) and Gum are generated as a by-product. The process is that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... during the process of refining, the assessee is availing Cenvat credit on number of inputs namely hexane, caustic soda phosphoric acid, etc. De Oiled Cake (D.O.C.) and Gum manufactured in factories of solvent extraction industries is exempt from payment of the Central Excise Duty under Notification No. 115/75-C.E., dated 30-4-1975, the benefit of which the assessee is also claiming. However, the AA was of the view that Rule 6(2) of erstwhile Cenvat Credit Rules, 2002 and Rule 6(2) of Cenvat Credit Rules, 2004 did not permit the assessee to avail such input credit. It is the claim of the AA that the assessee was manufacturing both dutiable as well as exempted goods but was not maintaining separate account for receipt, consumption and inventory of inputs meant for use in the manufacture of dutiable final products and the quantity of inputs intended for use in the manufacture of exempted goods. Accordingly, the AA was of the opinion that under Rule 6(3) of the Cenvat Credit Rules, 2002, they should have cleared the DOC and Gum by reversing an amount equal to eight per cent. of the price, and according to Rule 6(3)(b) of Cenvat Credit Rules, 2004 they should have cleared the DOC and Gu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... not come into play in case of waste, scrap, or by-product even if they are exempted or/are chargeable to nil rate of duty. Explaining the process of manufacturing, it was also submitted that the respondent-assessee is not manufacturing two final products. The unintended/forced products namely DOC and gum soap stock are by-products, though DOC/gum soap stock are capable of being sold and it fetches some price. However, in the instant case gums/soap stock is normally used for the further manufacture of acid oil but cannot be said to be the second/third final product for the purpose of Rule 6 of the Cenvat Credit Rules, 2002. The assessee accordingly, relied upon the exemption Notification No. 115/75-C.E., dated 30-4-1975 and accordingly submitted that the assessee is not entitled to be levied the different duty. 5. However, the AA was not satisfied with the explanation offered and vide order dated 7-3-2006 held the assessee liable to duty equal to 8/10 per cent. according to the datas for the periods 30-4-2003 to 30-11-2004 and 1-12-2004 to 28-2-2005 and also imposed recovery to the extent of ₹ 8,84,29,478/-, the penalty under Rule 13(2) was also levied. Further penalty of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in respect of the duty under Notification No. 6/2006. In so far as the subsequent event is concerned, the CESTAT accepted the contention of the respondent-assessee that they are willing to reverse whole of the credit availed on common inputs used in manufacturing of the excisable as well as exempted goods and accordingly, remitted the matter to the AA with a direction to accept the offer of the respondent-assessee to reverse the entire credit. This order of the CESTAT is assailed before us by the appellant-Revenue. 9. Shri Anil Mehla, ld. Counsel for the appellant-Revenue, submitted that the CESTAT was unjustified in holding in so far as the first period is concerned by holding that the Revenue was aware of taking credit in respect of common inputs and clearing products without payment of duty as well as on payment of duty and in this regard, he submitted that if the claim was not proper or not rightly claimed, mere acceptance of the claim by the Revenue authority was not sufficient. A claim, which is otherwise not tenable in law, even if accepted by the AA, will not make the claim as allowable which on facts was disallowable. He further contended that as far as subsequent perio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dule hereto annexed, from the whole of the duty of excise leviable thereon. THE SCHEDULE 1. Coir Industry. 2. Cashew Industry. 3. Tanning Industry. 4. Oil Mill and Solvent Extraction Industry. 5. Rice Milling Industry. 13. In our view, when the respondent-assessee had been furnishing regular returns on monthly basis disclosing therein about clearing goods manufactured out of common inputs without payment of duty as well as on payment of duty, then, there appears to be no suppression of facts with an intention to evade payment of duty. Therefore, we are of the view that the CESTAT rightly considered that on 26-6-2003, it was first time that the Revenue made out a claim and therefore, when it was already aware of the past practice supported by the Circular of the Board, therefore, in our view, there was no suppression of facts. Therefore, the CESTAT was correct in holding that the demands beyond the normal period of limitation are time-barred and therefore, correctly set aside the submission of the Revenue. 14. In so far as the subsequent period is concerned, in our view, the CESTAT, after accepting the contention of the responde ..... X X X X Extracts X X X X X X X X Extracts X X X X
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