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TMI Blog2019 (8) TMI 1172X X X X Extracts X X X X X X X X Extracts X X X X ..... goods on such machinery which is used for processing the exempted products after they are separated from the raw material. Ld. Counsel for the appellant sought to impress upon the Bench that the entire process is an integrated one and therefore CENVAT Credit cannot be denied on the capital goods. Appeal dismissed - decided against appellant. - Central Excise Appeal No. 30211/2019 - A/30737/2019 - Dated:- 26-8-2019 - MR. P. VENKATA SUBBA RAO, MEMBER (TECHNICAL) Shri G. Prabhakara Sastry, Advocate for the Appellant Shri C. Mallikharjun Reddy, Superintendent/AR for the Respondent. ORDER PER: MR. P. VENKATA SUBBA RAO 1. This appeal is filed by appellant against Order-in-Appeal No. VIZ-EXCUS- 001-APP-021-18-19, dated 27.04.2018. This is the second round of litigation after the matter was earlier remanded vide Final Order No. 21727/2014, dt. 16.09.2014 to the original authority, without expressing any opinion and leaving all matters open and with a direction to reconsider the manufacturing process once again and the use of machinery by the appellants, afresh. 2. The appellant herein is a manufacturer of Maize Starch and Dextrine falling under CETH ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... through cleaning machine and separate cobs and dust etc. Corn fed into the steeping vats and maintain 50 52 degree centigrade with SO2 water for 44 50 hours to achieve final moisture of corn 30 40%. Germ separation: After steeping, steeped maize fed into the Grinder 1 2 for separating the Germ through Germ cyclone. Along with Germ, Starch and Protein liquid is also going along with Germ to Germ filter and Squeezer (squeezing machine) for reducing the moisture and rest of starch and protein liquid goes to main process and semi wet germ (55% moisture) will be goes to Tubuler dryer for drying and packing. Fibre separation: Rest of the material like Starch, protein and Fibre fed into the fine milling. In this process all the ingredients are completely grinded and finally it goes to the multi stage (fibre separation area). Liquid (starch and protein) again it goes to process and after squeezing, Fibre will dry through Tubular Dryer or Rotary Dryer and will be packed. After squeezing the fibre the moisture content of the fibre is 55%, due to its perishable nature they have to dry immediately through Tubular Dryer or Rotary Dryer to reduce moistur ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... redit on the disputed capital goods. He sought to rely on the order of the Principal Bench of CESTAT in the case of Rana Sugar Ltd. vs. CCE, Ludhiana [2012(11)TMI 299-CESTAT, New Delhi] in which it is held that in case the capital goods/inputs were used in the process of manufacture of intermediate exempted goods which were further used in the manufacture of dutiable products, CENVAT Credit cannot be denied. With respect to the specific three capital goods, he submitted as follows: a) DECANTER FOR GLUTEN: Gluten is an intermediate stage in the manufacture of starch and it is subjected to the decantation for obtaining pure starch which is dewatered and starch is processed and packed for sale. Hence the decanting cannot be treated as used for manufacture of gluten, but it is a process for manufacture of starch. b) CPB (Flash DRYER) USED FOR DRYING THE GLUTEN: Flash Dryer is used for extracting process water and protein flour from the process material and unless the water along with starch is extracted and used in the system neither gluten nor substantial process of starch refining can be completed. In a process involving multiple operations, it is not possible to earm ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Sixth stage Washing of starch with raw water to remove the fine layer of gluten which would not be removed from the separation stage 9th stage 99.6% Pure starch with 40% moisture is obtained at the last stage THE STARCH SEPARATED IS TO BE MADE FREE OF IMPURITIES LIKE GERM, GLUTTEN AND FIBRE WHICH IS COMPLETED AT THE LAST STAGE Seventh stage Gluten drying Vacuum drier, cage mill drier Gluten (65% protein+25% starch+10% moisture) The starch of over 10% is further recovered from waste by washing stilting and cage mill dryer. Eighth stage Starch Drying Centrifuge and Flash Drying Starch @ 12% moisture and 0.4% gluten The Final produce offered for sale is with 0.4% Gluten. Ninth Stage Fiber and Germ drying Screw press and bundle drier All remnant starch is recovered to the maximum extent Also fibre and Germ are removed by washi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... redit on the inputs and capital goods used in the manufacture of exempted intermediate product cannot be denied when the final product is dutiable. In the present case, the starch is the dutiable final product and gluten maize germ are final products which are exempted. What is sought to be denied is CENVAT Credit of capital goods on such machinery which is used for processing the exempted products after they are separated from the raw material. Ld. Counsel for the appellant sought to impress upon the Bench that the entire process is an integrated one and therefore CENVAT Credit cannot be denied on the capital goods. Even if the process is an integrated one, if a separate machinery is used for processing the exempted products after it has been separated from the main product or raw material and such machinery is used only for processing exempted products, CENVAT Credit cannot be availed by the appellant in view of the explicit provisions of Rule 6(4) of CCR 2004. I have also gone through the table submitted by the Counsel for the appellant cited above but the equipment indicated therein do not include the three equipments in dispute. Therefore, this argument does not carry their ca ..... X X X X Extracts X X X X X X X X Extracts X X X X
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