9911796707
TMI Blog2004 (10) TMI 253X X X X Extracts X X X X X X X X Extracts X X X X ..... ury sold by the assessee was of pre-modvat stock which was required to be treated as waste arising from the processing of inputs. Therefore setting aside the demand of Rs. 17,01,965.52/- & penalty under Section 11AC of the Central Excise Act 1944 along with the interest under Section 11AB. 2. Pursuant to an inquiry made, a show cause notice dated 26-12-2001 was issued. In brief the facts are - The Preventive Officers of Central Excise, visited the factory on 15-2-1999. During the course of verification of records, the officers observed that the assessee was manufacturing Caustic Soda by Mercury Process and was availing credit under erstwhile Rule 57A in respect of input Mercury used in the manufacturing process. Subsequently, the assessee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... invoices /certificates and the Photostat copies of 14 nos. of commercial invoices issued for the clearance of used/spent Mercury from their factory during the period from October 1997 to March 1999. Recorded on 4-8-2000, Shri Nisharg K. Rajvant submitted two statements showing information of :- (i) Credit availed on input Mercury by M/s. NRC Ltd; Mohone for the period from April 1992 to April 1996. (ii) Clearances of spent/used Mercury (Mud) effected by M/s. NRC Ltd; Mohone during the period from October 1997 to March 1999. It was confirmed that the information given in his above referred two statements dated 4-8-2000 was correct and complete in all respects; that they had availed Modvat credit on Mercury from April 92 onwards and have ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the same were not submitted to the excise department at any time. He further deposed that he could not submit copies of RG23A Pt. I and Pt. II for the period from November 1991 to March 1992 and B.E. No. 5855 dated 19-4-91, as the same were not traceable. However, he accepted that their company had availed Modvat credit on input Mercury from December 1991 onwards and not from April 1992 as stated earlier; that during the year 1991-92, they had received total 3760.50 Kgs. of Mercury valued at Rs. 6,19,445/- (approx.) involving Central Excise duty of Rs. 92,917/- (BED) and Rs. 4,696/- (SED) of which Modvat credit was availed/utilized by them. Scrutiny of the records revealed that the total quantity on which Modvat credit availed by them du ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... les, 2001; (v) follow the procedure as prescribed under erstwhile Rule 173G(1) read with Rule 9(1) of Central Excise Rules, 1944; (vi) file of the monthly return as required under erstwhile Rule 173G(3) read with Rule 54 of Central Excise Rules, 1944 read with Rule 12 of the Central Excise (No.2) Rules, 2001. 3. After hearing both sides and considering the material/grounds in the appeal and the cross objection filed, it is found - (a) Admittedly, on the mercury received, Modvat credit was availed and the same was cleared as spent/used mercury thereafter. The reversal/recovery of the amounts of credit if at all has to be effected only under the provision of rule 57 (1) and not under Section 11A(1) provision and or under the rule 9(2) as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ered by rule 57F(18) which with such rule (a) reads as - " (18) any waste, arising from the processing of inputs in respect of which credit has been taken a) Removed on payment of duty as if such waste is manufactured in the factory." This provision at the first instance induces one to consider that the spent mercury being a waste input could be charged to duty? However, when it is found that waste Mercury is spent catalyst, having been used as a catalyst in the process of manufacture of Caustic Soda, the initial enthusiasm to order the recovery of duty wanes, as catalyst by definition is not understood as a Raw Material even though it may be an input covered under rule 57A. That, spent catalyst cannot be manufactured goods, has been uph ..... X X X X Extracts X X X X X X X X Extracts X X X X
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