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TMI Blog2025 (3) TMI 962X X X X Extracts X X X X X X X X Extracts X X X X ..... duct, which may be a low grade Silico Manganese. However, it is a fact on record that Ziking (slag) is a by-product and not the final product manufactured by the appellant. In these circumstances, reliance placed on Monnet Ispat and Energy Ltd. [2016 (8) TMI 543 - CESTAT NEW DELHI] where it was held that 'It is an admitted fact that Silico Manganese slag and Ferro Chrome slag emerge involuntarily during the course of manufacture of the final product. Since, the appellant had no intention to manufacture slag, the same, in my opinion, should not be considered as excisable goods. Since the slag seized to the excisable goods, the question of dutibility or exemption does not arise. Therefore, the embargo created in Rule 6(3) of the Cenvat Credit Rules, 2004 for payment of amount equal to 5%, 6% or 10% of the value of exempted goods has no application in the circumstances of the present case.' It is found that the issue as to whether a by-product is liable to duty has been examined by the Tribunal at Bangalore in the case of Haryana Steel and Power [2015 (11) TMI 771 - CESTAT BANGALORE] wherein it was held 'amendment in Section 2(d) will not change the scenario inasmuch as t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rches at the factory premises, office and residence of the Director of the appellant-company (appellant No. 2 herein). During the course of search of the office premises, from the laptop / pendrive of one Shri Mahesh Paswan, who was temporarily employed as an Accountant, the Officers recovered data showing entries of goods sold by the appellant. The Officers also recorded self-implicating statement of Shri Mahesh Paswan who admitted that he shortlists the transaction of duty-paid clearances and non-duty paid clearances in Excel sheet and hands over the details of duty-paid clearances to Shri Sagar Kumar Shaw for maintenance of records. 2.1. Shri Mehul Kumar Basant, the appellant No. 2, had stated that he had not asked Shri Mahesh Paswan to maintain any specific data as recovered from his laptop and Shri Mahesh Paswan himself made the entries of sold goods for the purpose of monitoring and collection of Sales Tax Forms F, G & H from clients. 2.2. The appellant, during the course of investigation, has deposited an amount of Rs.50, 00, 000/-. 3. Thereafter, a Show Cause Notice dated 11.10.2017 was issued for recovery of Rs.11, 31, 89, 151/- comprising a demand of Rs.11, 01, 94, 275 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 19 dated 17.12.2019] v. Union of India v. Ahmedabad Electricity Co. Ltd. & ors. [Appeal (Civil) 2168-2169 of 2001 - Supreme Court - Order dated 29.10.2003] 4.1. With regard to the confirmation of demand on account of the alleged shortage of stock of Silico Manganese, it is the submission of the Ld. Counsel for the appellants that the stock taking was done on eye estimation basis alleging that 114.13 M.T. of Silico Manganese on the day of visit was found short. He submits that in fact, the officers came on the said date and came to the factory premises at 1:00 p.m. and concluded the search proceedings by 5:00 p.m.; it is submitted that in four hours, the officers first initiated the search proceedings by calling the Panch witnesses showing search warrants to the appellant, taking their signatures on the warrant, and thereafter, taking rounds of the factory for searching each and every corner of the premises which is spread over 2.7 acres of land. It is stated that the Officers had recovered various records of procurement of raw material, records of production, sale returns under different Acts and scrutinized the same, selected the records relevant for investigation in the case, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pted goods has no application in the circumstances of the present case. In this context, I find that the C.B.E. & C. in Chapter 5 at Paragraph 3.7 in the Supplementary Instructions 2005 have clarified that Cenvat credit is admissible in respect of the amount of inputs contained in any of the waste, residue or by-product. Further, I find that this Tribunal in the case of Haryana Steel & Power v. CCE & ST, Mysore - 2015 (325) E.L.T. 400 (Tri.-Bang.) and ISMT Ltd. v. CCE, Pune - 2015 (329) E.L.T. 919 (Tri.-Mum.) have held that slag emerged as by product of waste during manufacture of the main final product should not come within the purview of manufacture of exempted goods, and thus, the requirement of Rule 6(3) of the Rules, will have no application. In view of above, I am of the opinion that confirmation of amount under Rule 6(3) of the Rules by the authorities below is not in conformity with the Cenvat statute. Therefore, I set aside the impugned order and allow the appeal in favour of the appellant." 7.1. Further, we find that the issue as to whether a by-product is liable to duty has been examined by the Tribunal at Bangalore in the case of Haryana Steel and Power (supra) wherei ..... X X X X Extracts X X X X X X X X Extracts X X X X
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