9911796707
TMI Blog2003 (3) TMI 238X X X X Extracts X X X X X X X X Extracts X X X X ..... h results in generation of Carbon Black in particle form and off gases or lean gases; that as off gases contains Carbon monoxide, it could not be flared up in the atmosphere being hazardous one and in terms of anti-pollution laws, they are required to burn Carbon monoxide content out of this mixture of gases which result in generation of heat; that the said heat is either used further in the manufacturing process or is utilized for generation of high pressure steam as a by-product in the factory; that the steam so generated is utilized in or in relation to the manufacture of Carbon black in the factory and part of the steam is sold to M/s. Hindalco Industries Ltd.; that the Commissioner under the impugned Order has confirmed the demand and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ribunal in the case of Gas Authority of India Ltd. v. Commissioner of Central Excise, 2001 (136) E.L.T. 1019 (Tribunal) = 2001 (99) ECR 49 wherein it has been held that when a by-product is cleared at nil rate of duty, benefit of Rule 57D is to be extended to the manufacturer; that reliance has also been placed on the decision in the case of Aarti Drugs Ltd. v. Commissioner of Central Excise - 2001 (133) E.L.T. 385 (Tribunal) = 2001 (45) R.L.T. 213 (CEGAT). Learned Chartered Accountant contended that in view of these decisions proportionate Modvat credit cannot be denied on the inputs used in the exempted waste arising in the manufacture of carbon black. Finally, learned Chartered Accountant submitted that the demand is time barred as the s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lf is a final product. He emphasized that the generation of steam is three steps away from cracking of Carbon Black Feed Stock and as such the steam cannot be treated as by-product at all; that generation of steam is a conscious activity undertaken by the Appellants; that according to S.B. Sarkar's Words and Phrases of Excise and Customs, 'By-Product' means a product formed in the process of making something else; that as in the present matter, the steam is generated consciously by using the heat generated by burning of off-gases, it cannot be said that generation of a steam is an incidental to the process of manufacture of carbon black. The learned Senior Departmental Representative referred to the decision in the case of Western India Ply ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Modvat credit in respect of fuel unless it could be shown that the notified product as such was cleared without payment of duty. He also relied upon the decision in the case of Oriental Carbon and Chemical Ltd. v. Commissioner of Central Excise Meerut - 1998 (102) E.L.T. 321 and Sudarshan Chemicals Industries v. Commissioner of Central Excise Mumbai 1998 (103) E.L.T. 406. Finally, he referred to Boards Circular No. 11/92 dated 18-5-92 wherein the Board has clarified that the Modvat credit could be taken on the full quantity of Sulphuric Acid used in the manufacture of detergents powder and the credit is not restricted in respect of quantity actually consumed in the manufacture of detergent powder. The learned Senior Departmental Representat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hat is carbon black. Rule 57D(1) of the Central Excise Rules at the relevant time provided that credit of specified duty "shall not be denied or varied on the ground that part of inputs is contained in any waste, refuse, or by-product arising during the manufacture of final product, or that the inputs have become waste in or in relation to the manufacture of the final product, whether or not such waste, refuse or by-product is exempted from 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) that the credit shall not be denied on the ground that part of the inputs is contained in a by-product. It is also ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ly creates the product but also creates other goods which are refuse, waste or by-product. The classification of goods into final products, by-products, waste and refuse is mainly on commercial consideration and the Plan of manufacture." The Tribunal in Gas Authority of India Ltd. case, after referring to definition of by-product as given in Chamber's Dictionary and Webster's Compressed Dictionary has held that the lean gas obtained by processing natural gas to remove propane and butane is nothing but a by-product and the provisions of Rule 57CC were not applicable to lean gas and the benefit of Rule 57D was extended. 7. Following the ratio of these decisions, we are also of the view that provisions of Rule 57CC would not be applicable to ..... X X X X Extracts X X X X X X X X Extracts X X X X
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