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TMI Blog2023 (6) TMI 454X X X X Extracts X X X X X X X X Extracts X X X X ..... on exempted sulphuric acid is not attracted. The impugned Orders-In-Original are without any merit and is set aside - appeal allowed. - Excise Appeal No. 10697 of 2015-DB Excise Appeal No. 11352 of 2016 , Excise Appeal No. 10902 of 2017 , Excise Appeal No. 10904 of 2019 - Final Order No. A/11215 – 11218/2023 - Dated:- 8-6-2023 - HON'BLE MEMBER ( TECHNICAL ) , MR. RAMESH NAIR And HON'BLE MEMBER ( TECHNICAL ) , MR. C. L. MAHAR Shri Anand Nainawati Shri Ishan Bhatt , Advocates for the Appellant Shri Prabhat K Rameshwaram , Additional Commissioner ( AR ) for the Respondent ORDER C. L. MAHAR The brief facts of the case are that the appellant are engaged in manufacture of Copper Cathodes , Continuous Cast Copper Rods, Sulphuric Acid and Phosphoric Acid etc falling under CETH 74228 of Central Excise Tariff Act, 1985. The appellant has an oxygen gas producing plant within their factory premises and oxygen produced in the oxygen plant is further used in manufacture of Copper Cathodes and Sulphuric Acid. The manufacturing process involved is that the copper concentrate is mixed with the silica and charged in smelting furnace with oxygen . In the pr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... TOTAL 38,03,60,336 4. The issue which is before us to answer is whether the oxygen captively consumed in the manufacture of dutiable Copper Cathodes as well as exempted Sulphuric Acid can be denied the benefit of exemption Notification No. 67/95- CE dated 16.03.1995. 4.1 We heard both the sides. We find that the matter is no longer res- integra . The issue has already been settled by the Hon ble Supreme Court in the case of Union of India Vs. Hindustan Zinc Ltd reported under 2014 (303) ELT 321 (SC). The decision of the Hon ble Supreme Court in the case of Hindustan Zinc has also been followed by this Tribunal in the case of Sterlite Industries India Ltd vs. CCE, Tirunelveli reported under 2016 (331) ELT 255 (Tri. Chennai). The relevant extract of above mentioned decision of M/s. Sterlite Industries (Supra) is reproduced below :- 6. After careful consideration of the submissions of both sides and on perusal of records, we find the short issue involved in the appeal relates to denial of benefit of captive consumption Notification No. 67/95-C.E., dated 16-3-1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... SO3 or to Sulphuric Acid. Therefore, on merit itself it is established that oxygen produced captively is not used as an input in the manufacture of Sulphuric Acid and appellant is eligible for Notification No. 67/95 on oxygen on merit. 9. Further, it is pertinent to state that so long as Oxygen produced in their plant is used captively in the manufacture of final product (i.e.) copper concentrate and cleared on payment of duty, the appellants are rightly eligible for exemption under Notification No. 67/95 for oxygen. The case of the department is that appellant used the inputs i.e. oxygen in the manufacture of Sulphuric Acid which is cleared at Nil rate under exemption notification. As discussed in the preceding paragraphs and it is established from the chemical process and from manufacturing process there is no justification for the revenue s view that O2 is used in the manufacture of H2SO4. It is evident that oxygen so produced in their captive plant is used only in the purification of copper concentrate in the manufacture of copper anode. Therefore, appellants are eligible for captive consumption of Oxygen under Notification No. 67/95 as the final product copper anode is e ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... for the production of sulphuric acid. It was argued by the learned Counsel for the respondents, which could not be disputed by the learned Solicitor General, that emergence of sulphur dioxide in the calcination process of concentrated ore is a technological necessity and then conversion of the same into sulphuric acid as a non-polluting measure cannot elevate the sulphuric acid to the status of final product. Technologically, commercially and in common parlance, sulphuric acid is treated as a by-product in extraction of non-ferrous metals by companies not only in India but all over the world. That is the reason why the department accepted the position before the Tribunal that sulphuric acid is a by-product. .... ..... ..... 20. Let us now examine the position contained in Rule 57CC on the touchstone of the aforesaid position. No doubt, Rule 57CC requires an assessee to maintain separate records for inputs which are used in the manufacture of two or more final products one of which is dutiable and the other is non-dutiable. In that event, Rule 57CC will apply. For example, a tyre manufacturer manufactures different kinds of tyres, one or more of which were exempt like t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he 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 Rules 57A, 57B and 57D along with Rule 57CC becomes inevitable. We have already reproduced Rule 57D above. It can be easily discerned from a combined reading of the aforesaid provisions that the terms used are inputs , final products , by-product , waste products , etc. We are of the opinion that these terms have been used taking into account commercial reality in trade. In that context when we scan through Rule 57CC, reference to final product being manufactured with the same common inputs becomes understandable. This Rule did not talk about emergence of final product and a by-product and still said that Rule 57CC will apply. The appellant seeks to apply Rule 57CC when Rule 57D does not talk about application of Rule 57CC to final product and by-product when the by-product emerged as a technological necessi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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