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TMI Blog2021 (10) TMI 307X X X X Extracts X X X X X X X X Extracts X X X X ..... jera, Learned Counsel appearing on behalf of the appellant submits that Silica Sand and Ball Clay are by-product which are generated during excavation of Lignite. This Silica Sand and Ball Clay are excavated from the upper layer during the mining which is unavoidably generated as the main product is Lignite, therefore, both the products are being by-product, no amount is required to be paid in terms of Rule 6. He further submits that as per the contract with the contractor for excavation, it is only in respect of Lignite and the payment terms is also with respect to the Lignite only and no payment is made for excavation of by-product namely Silica Sand and Ball Clay, for the reason that Silica Sand and Ball Clay is unavoidably generat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... State Transport Corpn. (Coimbatore) LTd. Vs CCE 2019 (28) GSTL 225 (Tri. Chennai.) 3. Shri Vinod Lukose, Learned Counsel appearing on behalf of the revenue reiterates the finding of the impugned order. He further submits that there is no difference between Lignite, Silica Sand and Ball Clay which are excavated in the same mining process, therefore, there are three different minerals, it cannot be considered that two product out of these three are by-product, therefore, the product namely Silica Sand and Ball Clay are also the final product as well as being exempted product, Rule 6 shall apply and appellant is required to pay an amount under Rule 6 of Cenvat Credit Rules, 2004. He placed reliance on the following judgments: * CCE Thane-I ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ute top soil, silica sand, sandstone, clay, shale etc. B. Method of Mining i. Lignite has been mined by opencast mining method, using conventional mining machinery like hydraulic shovels and dumpers for OB/IB removal and excavation & loading of lignite in to consumer's trucks or dumpers/ trucks of other agency from mines working face as directed by GDMC. Entire mining operations, inclusive of all ancillary operations, are to be carried out by the contractor. The entire topsoil excavated from the mining area will be stacked separately or spread over the reclaimed area as directed by the General Manager (P). Other minerals like Silica sand, Ball clay or any other economic mineral, if found in the mining area, will be mined out separately ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... al products, and whether directly or indirectly." From the above para, it is clear that any input/input services contained in any by-product/waste/refuse, Cenvat Credit cannot be varied or denied. With this logic demand under Rule 6 in respect of by-product is not applicable. This issue has been considered in various judgments as cited by Learned Counsel. Once it is established that the product in question are by-product then it is settled in respect of by-product demand under Rule 6 will not sustain. Accordingly, in the present case also, Silica Sand and Ball Clay being a by-product, no demand under Rule 6 shall sustain. 6. Accordingly, the impugned orders are set aside and appeals are allowed. (Pronounced in the open court 06.10.2021)< ..... X X X X Extracts X X X X X X X X Extracts X X X X
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