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TMI Blog2019 (7) TMI 1776X X X X Extracts X X X X X X X X Extracts X X X X ..... d 09.08.2018 Order-in- Original No. 03/1999-CE (Demand) dated 08.01.1999 84/1999-CE (Demand) dated 31.08.1999 118/1999-CE (Demand) dated 29.10.1999 59/2000-CE (Demand) dated 13.04.2000 101/2001-CE (Demand) dated 29.09.2001 Show Cause Notice 27.03.1998 16.02.1999 29.04.1999 10.09.1999 03.01.2000 12.05.2000 Period of dispute Sept. 1997 to Jan 1998 Aug 1998 to Dec. 98 Jan.1999 to Mar. 99 April 1999 to June 1999 July 1999 to Nov. 1999 Dec. 1999 to March 2000 Demand Rs. 67,62,414/- Rs. 1,32,24,841/- Rs. 23,43,579/- Rs. 92,24,453/- Rs. 82,38,070/ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed in the table above. Being aggrieved, 5 appeals were preferred, which have been disposed of by the common Order-in-Appeal No.82-86 / JVR/18-19 dated 09.08.2018. By the said order, the appeals have been rejected. Being aggrieved, the assessee-appellant are before this Tribunal. 4. We have heard Ms. Sukriti Das, ld. Counsel for the appellants and Mr. H.C. Saini, Ld. D.R. for the Department. 5. It is submitted on behalf of the appellant that the silver as is cleared by the appellants is merely produced as a by-product during the process of extraction of zinc and lead from the respective concentrates/poles. She has explained the process of the extraction involving various stages to impress upon that the impugned silver is an unavoidable pro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is prayed to be dismissed. 7. After hearing both the parties and perusing records as well as case laws cited, we adjudicate the aforementioned controversy in following terms:- 7.1 The appellants admittedly are extracting zinc and lead etc. from the respective ore/concentration. Admittedly there are two processes employed by the appellant for the said extraction. First is Hydro- Metallurgical process. There is no dispute as far as this process is concerned since no silver is produced during this process. However, with respect to another process called Pyro-metallurgical process, it is observed that the process is a pre-stage process, whereby zinc & lead both are extracted from the combined mixture of zinc concentrate lead concentrate ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... perusal of this procedure makes it abundantly clear that this pyro silver is being extracted as an unavoidable remnant which apparently and admittedly cleared by the appellants without demand of duty due to specific exemption available to the assessee. The process further clarifies that since no other separate activity or process is being employed by the appellant to extract the product, which has been cleared by them, the extraction of the impugned silver cannot at all be called as the activity of manufacture and therefore, has rightly been impressed upon to be out of the ambit of Section 57 CC of Central Excise Rules, 1944. The argument of the Department that the unavoidable remnant is a Pyro-silver but the product cleared by the appella ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ure of the final product, whether or not such waste or refuse or by-product is exempt from the whole of the duty of excise leviable thereon or chargeable to nil rate of duty or is not specified as a final product under Rule 57A." It is, thus, apparent from the provisions of Rule 57D(1) of the Rules that credit shall not be denied on the ground that part of the inputs is contained in a by-product. It is also not disputed that by-product in the present matter, namely, Sulphur Di-oxide gas is taken to Sulphuric Acid Plant for converting the same into Sulphuric Acid. We agree with the learned SDR that Sulphuric Acid has been obtained by the appellants as a conscious act. However, it cannot be claimed by the Revenue that any part of the inputs i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the process undertaken by the appellants to get Sulphuric Acid amounts to manufacture or not. The issue involved is whether the Modvat Credit of the duty paid on LDO is to be denied proportionately as the Sulphuric Acid, which has already been obtained by the appellants is exempted from payment of duty. It has been observed by the Tribunal in the case of Aarti Drugs Ltd. that "by insertion of Rule 57CC, there was no intention to eliminate the benefit available under Rule 57D(1) to a by-product.... The Marketability or otherwise of by-product is not really an issue." We, therefore, hold that the Modvat Credit is not deniable to the appellants. Accordingly, we set aside the impugned order and allow the appeal." 9. The similar observation ha ..... X X X X Extracts X X X X X X X X Extracts X X X X
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