9911796707
TMI Blog2004 (2) TMI 266X X X X Extracts X X X X X X X X Extracts X X X X ..... both gelatin and Calphor. It is only a by-product mother liquor which arises in the course of manufacture of gelatin is used separately for manufacturing Calphor. It, therefore, can not be stated that the inputs are used in the manufacture of both dutiable and exempted products. Similar situation was considered by the Tribunal in the case of Hi Tech Carbon [ 2003 (3) TMI 238 - CEGAT, NEW DELHI] by the learned Advocate. In the said case the final product of the Appellant was carbon black for the manufacture of which they were bringing inputs namely carbon black feed stock which was subjected to process of thermal cracking which resulted in generation of carbon black in particle form and off gases or lean gases. The Appellants therein were b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nts in the manufacture of a product which attracts nil rate of duty. We, therefore, set aside the impugned order and allow the Appeal. X X X X Extracts X X X X X X X X Extracts X X X X ..... lation to the manufacture of final products, and whether directly or indirectly. Learned Advocate also contended that it has been held by the Appellate Tribunal in a number of cases that the provisions of Rule 57CC would not apply to by-product which is covered under Rule 57D. Reliance has been placed on the decision in the case of Hi Tech Carbon v. CCE, Allahabad - 2003 (161) E.L.T. 407 (T) = 2003 (56) RLT 378]. 3. Countering the arguments, Shri Kumar Santosh, learned Senior Departmental Representative, submitted that the impugned product calphor is not a by-product emerging in the process of manufacture of gelatin; that as the process of manufacture given by the Appellants themselves, the mother liquor is treated with lime which results ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l Representative, therefore, contended that the Appellants were manufacturing both the dutiable as well as exempted products and therefore in terms of provisions of Rule 57CC of the Central Excise Rules, they were required to pay the amount equal to 8% of the price of the exempted products. 4. We have considered the submissions of both the sides. We observe that the Appellants are manufacturing gelatin. When bones are washed with caustic soda lye/flakes and HCL, a product known as mother liquor emerges which is a by-product in the process of manufacture of gelatin. Subsequently, this mother liquor is treated with lime which results into manufacture of Calphor which is di-calcium phosphate attracting nil rate of duty under Heading No. 23.02 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re also used simultaneously in the manufacture of both gelatin and Calphor. It is only a by-product mother liquor which arises in the course of manufacture of gelatin is used separately for manufacturing Calphor. It, therefore, can not be stated that the inputs are used in the manufacture of both dutiable and exempted products. Similar situation was considered by the Tribunal in the case of Hi Tech Carbon relied upon by the learned Advocate. In the said case the final product of the Appellant was carbon black for the manufacture of which they were bringing inputs namely carbon black feed stock which was subjected to process of thermal cracking which resulted in generation of carbon black in particle form and off gases or lean gases. The App ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he case of by-product. The Tribunal also observed that "by insertion of Rule 57CC, there was no intention to eliminate the benefit available under Rule 57D(1) to a by-product……. The marketability or otherwise of by-product is not really an issue". Both the decision in the case of Bharat Petroleum Corporation Ltd. and India Gelatin and Chemical relied upon by the learned Senior Departmental Representative do not advance the case of the Revenue. The issue involved in the present Appeal is not whether Calphor is an excisable product or not, the issue involved is whether the inputs in respect of which Modvat credit has been availed of has been used in the manufacture of Calphor and whether the Appellants are liable to pay an amount equal to 8% ..... X X X X Extracts X X X X X X X X Extracts X X X X
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