9911796707
TMI Blog2023 (8) TMI 121X X X X Extracts X X X X X X X X Extracts X X X X ..... ery through fractional distillation to produce products like Motor Spirit, High Speed Diesel, Superior Kerosene Oil, Aero Turbine Fuel, Liquid Petroleum Gas etc.. 3.1 The respondent initially paid the amount equivalent to the CENVATE credit attributable to inputs and input services used in relation to the manufacture of exempted clearance of petroleum product namely Liquefied Petroleum Gas (LPG). The equivalent CENVATE credit was paid in terms of Rule 6(3)(ii) of the CENVATE Credit rules, 2004. The respondent thereafter filed application seeking for refund of amount of Rs. 3,97,18,590/- as paid above in respect of exempted clearance of LPG under Rule 3 of the CENVATE rules. It was in respect of period indicated. 3.2 The refund sanctioning authority took the view that the amount was rightly paid and the refund was not liable to be granted. The Deputy Commissioner, Central Excise and Services Tax issued show cause notice dated 1.9.2014 to the respondent proposing to reject the refund claim. Thereafter, the Commissioner of Central Excise and Service Tax, Mumbai, passed Order-in-Original dated 9.3.2016 to reject the refund claim of the applicant. 3.3 The relevant portion from the Or ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed by the Respondent that Liquefied Petroleum Gas is a Byproduct and therefore Rule 6 has no application in the case of Liquefied Petroleum Gas? IV. Whether the Appellate Tribunal was right in holding Liquefied Petroleum Gases as a byproduct of petroleum refinery and not as a joint product with other petroleum produces that emerge by chemical reaction/fraction of common blend of raw material ?" 4. While the rival submissions were advanced and learned advocate for the appellant department raised several contentions as pleaded in the memorandum of appeal, there is no gainsaying that in the similar set of facts and involving identical issue in the Principal Commissioner, Central GST and Central Excise vs. M/s. Reliance Industries Ltd. being Tax Appeal No. 219 of 2022 came to be decided by the Division Bench of this court on 5.5.2022. It arose out of the order of the Central Excise Tribunal rejecting the refund claim of the several respondents with regard to the CENVATE credit reversed/paid for the inputs attributable to LPG products in terms of rule 6(3)(ii) of the CENVATE Credit Rules for the period between April, 2015 to March, 2016. 4.1 In the said Tax Appeal No. 219 of 2022, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... The relevant observations of this Court are extracted herein below for ease of reference: "8. Thus, on a plain reading sub-rule (1) of Rule 6, it is apparent that CENVAT credit is admissible in respect of the inputs used in the manufacture of dutiable goods and is inadmissible on such quantity of inputs which is used in the manufacture of exempted goods. Sub-rule (2) imposes an obligation on the manufacturer who manufactures final products and exempted goods from the common input to maintain separate accounts for receipt, consumption and inventory of inputs. Examining the applicability of the aforesaid rules to the facts of the present case, as noted hereinabove, it is not as if more quantity of Hydrochloric Acid is used than that required for manufacturing Gelatin or that by using a smaller amount of Hydrochloric Acid, the production of Mother Liquor could be averted. In the manufacturing process adopted by the assessee, it is not possible to manufacture Gelatin without Mother Liquor coming into existence. .................... When the entire quantity of input is used in the manufacture of Gelatin, the question of maintaining separate accounts or of paying a percentage of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... put must be attributed to having been used in the manufacture of the said dutiable final product, even if some other exempt final product emerges, inevitably. This is also the ratio of the judgment of the Apex Court in the case of Swadeshi Polytex Ltd. vs. CCE reported in 1989 (44) ELT 794 (SC). The relevant observations of the Apex Court are reproduced herein below for ease of reference - "20................It is clear, therefore, that the Tribunal failed to interpret the words of the exemption notification No. 201/79 properly and fully. The said notification exempted all excisable goods on which the duty of excise was leviable and in the manufacture of which any goods falling under Tariff Item 68 (i.e. inputs) had been used from so much of the duty of excise leviable thereon as was equivalent to the duty of excise already paid on the inputs. It is clear, however, that ethylene glycol was used in the manufacture of polyester fibre. It appears that methanol arises as a part and parcel of the chemical reaction during the process of manufacture when ethylene glycol interacts with DMT to produce polyester fibre. It is not possible to use a lesser quantum of the ethylene glycol to p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ption Notifn. No. 201/79, which was para materia with Rule 56A." Thus, the issue whether the LPG is byproduct or otherwise has become academic and need not required to be decide. In the result this Appeal fails and is hereby dismissed." 5.2 Incidentally, it may be noted that the aforesaid judgment dated 5.5.2022 of the Division Bench of this court was relied on by the Central Excise and Service Tax Appellate Tribunal, Mumbai in respect of similar claim of refund by the very company in relation to the period from April, 2010 to March, 2011, to set aside the Order-in-Original which rejected the refund request. 6. Learned advocate for the appellant when confronted with the decision of the Division Bench of this court of the said Tax Appeal No. 219 of 2022 involving the same issue and questions, was entirely at his receiving end and was not in a position to dispute the position of law emerging from the said decision, which holds the field. 6.1 In view of the above reasons and discussion, no question of law much less any substantial question of law can be said to be arising. The proposed substantial questions of law are already considered, decided and answered. No other questi ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
