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TMI Blog2020 (12) TMI 856X X X X Extracts X X X X X X X X Extracts X X X X ..... ed by the Tribunal in several cases, including that of the respondent in M/S. HINDUSTAN ZINC LTD. VERSUS CCE ST, UDAIPUR [ 2018 (2) TMI 1303 - CESTAT NEW DELHI] where it was held that Sulphuric Acid, which has emerged as a technical necessity, which is a by-product, cannot attract the provisions of the said Rule, as the same are applicable only to the final products . Thus, when the Tribunal rejected the contention of the Department regarding the distinction made between input and input service , it is not possible to accept the submission made by the learned authorized representative of the Department that the judgement of the Supreme Court in Hindustan Zinc Ltd. would not be applicable to the present case since it relates to input services and not inputs - appeal dismissed - decided against Revenue. - EXCISE APPEAL NO. 51151 OF 2019 - FINAL ORDER NO. 51647/2020 - Dated:- 9-12-2020 - MR. DILIP GUPTA, PRESIDENT AND MR. P. ANJANI KUMAR, MEMBER (TECHNICAL) Shri R.K. Mishra, Authorized Representative of the Respondent Shri B.L. Narasimhan, Advocate for the Appellant ORDER The Department has filed this appeal to assail the order dated Feb 15, 2019 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as well as input services were used in the manufacture of sulphuric acid and that all inputs and input services were consumed in the manufacture of dutiable final products; rule 6(3) of the Credit rules was not applicable in case of a by-product/waste emerging during the manufacturing process; and the issue raised in the show cause notice had been settled in favour of the respondent, in its own case, by the Supreme Cour in Union of India vs. Hindustan Zinc Ltd. [2014 (303) ELT 321(SC)], and also in cases of other assessees. 8. The relevant portion of the judgement of Supreme Court in Hindustan Zinc is reproduced below: 3 . In all these appeals filed by the Revenue, it has taken the position with the common contention as to whether the Respondents are liable to pay 8% excise duty as an amount under Rule 57CC of the Central Excise Rules, 1944 or 57AD of the Central Excise Rules, 2000 or Rule 6 of the Cenvat Credit Rules, 2004 (hereinafter referred to as 'Rules') on the value of by-product namely sulphuric acid which was cleared to fertilizer plants under exemption in terms of the bonds executed by the fertilizer plants. ********** 22 . Elaborating this contenti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . No. 2337 of 2011) the Tribunal has decided the matter following the judgment in the case of Swadeshi Limited (supra). In that case, Ethylene Glycol was reacted with DMT to produce polyester and ethanol. Methanol was not excisable while Polyester Fibre was liable to excise duty. Credit was taken of duty paid on ethylene glycol wholly for the payment of duty on polyester. The department took a position that Ethylene Glycol was used in the production of Methanol and proportionate credit taken on ethylene glycol was to be reversed. This Court ruled that the emergence of Methanol was a technological necessity and no part of ethylene glycol could be said to have been used in production of Methanol and indeed it was held that the total quantity of ethylene glycol was used for the production of polyester. The fact in all these three appeals appear to be identical to the facts and the law laid down in Swadeshi Polytex (supra). Therefore, this judgment is squarely applicable. 26 . Furthermore, the provisions of Rule 57CC cannot be read in isolation. In order to understand the scheme of Modvat Credit contained in this Rule, a combined reading of Rule 57A, 57B and 57D alongwith Rule 57CC ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... not? ******* As per the above definition of exempted goods, goods should be excisable goods. In this regard, the adjudicating authority observed in OIO that in the budget of 2018, the definition of excisable goods in clause (d) of Section 2 of the Central Excise Act, 1944 was amended by adding an explanation that for the purposes of this clause, goods include any article, material or substance which is capable of being bought and sold for a consideration and such goods shall be deemed to be marketable. In view of the above the adjudicating authority found that any by-product, though emerges due to technological necessity would be included in the definition of goods , hence fall within the ambit of term final product . Therefore, Rule 6 would become applicable automatically . ******* In the light of above, I find that from decision of the Hon ble Supreme Court and above circular, it is clear that sulphuric acid emerged in factory of appellant was not a manufactured product and the judgment applies to both periods before and after the insertion of explanation in Section 2(d) of Central Excise Act, 1944 by Finance Act, 2008. Since sulphuric acid emerged i ..... X X X X Extracts X X X X X X X X Extracts X X X X
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