9911796707
TMI Blog2004 (10) TMI 253X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 discontinued Mercury Process and switched 'over to Mem ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 Mer ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ommercial invoices and the copies of 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 whi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... duty on the goods and to remove such goods on payment thereof duty thereon as required under erstwhile Rule 173F of Central Excise Rules, 1944 read with Rule 4 and 6 of the Central Excise (No.2) Rules, 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) &nb ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nued in September 1997. There can be no reason to suspect that the Mercury as input on which credit was availed was not used for the purpose that it was brought. The use of such mercury is as a catalyst taking Caustic Soda findings. In fact the entire documents i.e. Show Cause Notice, the findings & the grounds admit that it was use/spent mercury catalyst. The disposal of such import were covered 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 char ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the goods and process are not be considered to be manufactured under Central Excise Law in India, they can not be covered under the provision of rule 57F18(a). The provision is to be read only to cover waste of such inputs, which are in nature of raw material and not waste arising out of capitals other than Raw Materials, or and Capital goods. Duty/credit on Waste Catalyst also cannot be demanded as for inputs there is no provision like capital goods of determining credit/duty recovery on proportionate depreciated values. 4. In view of our findings, we found no merits in Revenue appeal. 5. The Revenues appeal is required to be dismissed. Cross objection to stand disposed off accordingly. 6. Ordered accordingly. (Pronounced in Court on ..... X X X X Extracts X X X X X X X X Extracts X X X X
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