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TMI Blog2019 (4) TMI 1335X X X X Extracts X X X X X X X X Extracts X X X X ..... . - Appeal No. E/519/2009-DB - Final Order No. 77154/2018 - Dated:- 31-12-2018 - Mr. P.K. Choudhary, Member (Judicial) And Mr. Bijay Kumar, Member (Technical) Shri S. Mukhopadhyaya, AR - for the appellant Shri G.K. Mundhra, C.A. - for the respondent ORDER Per Bijay Kumar : Revenue has filed the present appeal, being aggrieved by the order of Commissioner (Appeals) dated 30.6.2009, vide which he has set aside the Order-in-Original No. 8/MP/Addl. Commr./08 dated 31.3.2008. 2. The issue involved in this case is that the respondent is engaged in the manufacture of Dehydrated Coal Tar (herein referred to as DCT for brevity), Coal Tar Pitch, Heavy Creosote Oil, Anthracene oil, Naphthalene etc. falling under Chapter 27 of the first schedule to the Central Excise Tariff Act, 1985 (hereinafter referred to as CETA ) for brevity). It was alleged by the Revenue that the respondent had contravened the provisions contained in Rule 6(2) of Cenvat Credit Rules, 2004 (hereinafter referred to as CCR, 2004 for brevity), inasmuch as they have manufactured the dutiable as well as exempted prod ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oods was contained in the waste, refuse or by-product. Under the cover of this provisions the benefit of exemption was extended to the manufacture from the payment of duty under Rule 57CC were common inputs were used for the manufacture of both dutiable and non-dutiable goods and the separate account could not be maintained for the said input. But in case at hand, the situation was different and benefit of erstwhile Rule 57(D) were not available to the appellant since inception of new Cenvat Credit Rules, 2004. Accordingly, CBEC Circular F. No. B- 4/7/2000-TRU dated 3.4.2000 relied upon by the Commissioner was not appropriate as the case was pertaining to the period 16th May, 2005 to March, 2007. Moreover, the circular clarified the Cenvat credit admissible and (A) on the part of the inputs contained in the waste, refuse or by-product and (B) if the inputs are used in the intermediate of the final product even if such intermediate is exempt from the payment of duty. But in the present case DCT product is not a waste, refuse or by-product but a final produce being cleared for home consumption and condition of exemption of intermediate product i.e. smoke/flue gas and had fulfilled ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n either (A) to maintain a separate account of fuel so used in the manufacture of exempted goods and pay an amount equivalent to Cenvat credit attributable to the same or (B) to pay an amount equal to 10% of the value of the exempted goods i.e. DCT and anything else in absence of provisions in new Cenvat Credit rules as prevailed under Rule 57(D) of erstwhile Central Excise Rules 1944. 6. Usage of heat being received from such fluke gas/smoke in the manufacture of exempted DCT effected the value of goods as a dutiable or exempted and ultimately the assessee gets the benefit directly or indirectly, on cost of common input i.e. fuel by way of availing Cenvat Credit. 7. It is also the submission of the Revenue that audit team of Commissionerate was aware of this fact and the impugned demand is time-barred as there is no suppression of fact by the respondent. However, in view of demand of duty amounting to ₹ 11,25,418/- for the period July 2007 to March 2007 i.e. one year back from the show cause notice issued on 4.2.2007 is sustainable. Therefore, it was prayed that the impugned order be set aside and the demand of normal period may be sustained and u ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ent cases. The ld. Commissioner (Appeals) has held that the provisions of Rule 57CC was not applicable in the facts and circumstances of the case in view of following decisions : (i) Hi-Tech Carbon Vs. CCE 2003 (161) ELT 407 (Tri.-Mumbai); (ii) J.S.W. Steel Ltd. Vs. CCE 2006 (204) ELT 313 (Tri.-Bang.); (iii) CCE Vs. Gas Authority of India Ltd. 2008 (232) ELT 7 (SC); (iv) Rallies India Ltd. Vs. UOI 2009 (233) ELT 301 (Bom.); (v) Narmada Gelatines Ltd. Vs. CCE 2009 (233) ELT 332 (Tri.-Del.). 11. It was also submitted by the ld. Advocate on behalf of the respondent that paragraph 5 of the Circular F. No. B-4/7/2000-TRU dated 3.4.2000 reads as under 5. Some doubts have been raised whether CENVAT credit would be admissible on the part of the input that is contained in any waste, refuse or bye product. In this context it is clarified that CENVAT credit shall be admissible in respect of the amount of inputs contained in any of the aforesaid waste, refuse or bye product. Similarly, CENVAT should not be denied if the inputs are used in any intermediate of the final product even if ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rbon black is not an excisable product. Mere fact that due to environmental laws, the appellants are compelled to burn the carbon monoxide content from the off gas and use the heat so generated from lean/off gas, does not make it excisable. 15. Without prejudice to the aforesaid submissions, the respondent further submits that process of dehydration of Coal Tar does not amount to manufacture within the meaning of Section 2(f) of the Central Excise Act and as such the provisions of Rule 6 of Cenvat credit were applicable in the instant case. In the present case, the process of dehydration of Coal Tar does not result in emergence of any new or different article having a distinctive name, character or use. After carrying out the process of dehydration, the goods remain the same viz. Coal Tar. The technical characteristic and use of the goods also remain the same. The process of dehydration simply results in removal of the moisture content from the Coal Tar. In technical and commercial parlance, the Coal Tar and dehydrated Coal Tar are treated as the same commodity. The Additional Commissioner and primary adjudicating authority has accepted that processing by way of dehyd ..... X X X X Extracts X X X X X X X X Extracts X X X X
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