9911796707
TMI Blog2005 (4) TMI 148X X X X Extracts X X X X X X X X Extracts X X X X ..... or otherwise. The expression 'by-product' occurring in Rule 57D has to be read in the context in which it is used and in line with the other words such as 'waste, refuse' mentioned therein. This Rule merely says that credit shall not be varied on the grounds mentioned therein. The Department is not attempting to vary the credit. It is only interpreting Rule 57CC, which provides for collection of certain amount at a certain percentage under the circumstances mentioned therein. As the DR rightly points out that the provisions of Rule 57D cannot negate the provisions of the preceding Rule 57CC. We observe that the appellants do not dispute the amounts involved. In other words they do not question the way the sums due are calculated. One could take a view that since at the time when the sums were demanded there were no provisions to recover them, the matter should be remanded to start recovery proceedings under Rule 6 read with Rule 12 of Cenvat Credit Rules, 2002. Such a views at best is pedantic and does not serve the ends of justice. We are of the opinion that the ends of justice are better served if the impugned orders of the Commissioner are upheld, in view of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mponent of the zinc concentrate it cannot be said that the CVD paid by the appellant was for sulphur present in the zinc concentrate. Consequently it cannot be said that the appellant has availed Modvat credit in respect of duty paid on the input (Sulphur) which went into the manufacture of sulphuric acid which was cleared without payment of duty. Rule 57CC does not therefore get attracted; that Sulphuric acid generated during the process of manufacture of zinc is a by-product. Rule 57CC/R6 does not apply in respect of clearances of by-products [2002 (49) RLT 934], [2002 (144) E.L.T. 447 (Tri.) = 2002 (50) RLT 657], [2001 (136) E.L.T. 1019], [2002 (141) E.L.T. 695] etc. relied upon; that during the relevant period there was no provisions to recover amounts under Rule 57CC/R6 if such amounts have not been paid/short paid. It is only in 2002 machinery provisions were introduced and such provisions cannot be used for collecting amounts which were due prior to their introduction; that for the period prior to 19-8-2002 the Circular of 2001 governed the field and hence a reversal of the credit attributable to the exempted final products was sufficient compliance with the Rule [2003 (158) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and in the way of enforcement of the demand. 5. We have considered the rival submissions carefully. 6. Rule 57CC comes into play when an input on which duty is paid (CVD in the present case) is used in the production of both dutiable and exempted final products. When separate accounts are not maintained to indicate how much of the inputs is used in the manufacture of each of the types of final products (dutiable and exempted) an assessee is required to pay an amount equal to 8% of the price of the exempted product when such product is cleared. It is an admitted fact that Sulphuric Acid cleared by the appellant attracted Nil rate of duty, when it is cleared for certain specific purposes. The modvatable input used in the manufacture of exempted goods is zinc concentrate. The appellants argument that they paid duty on the zinc component of this concentrate and not on the sulphur that it contained and therefore Rule 57CC is not attracted when Sulphuric Acid is cleared without payment of duty is not acceptable. In the present case the input that has gone into the production of Sulphuric Acid in zinc concentrate. The fact that the appellant has paid the foreign supplier only for the zinc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s only interpreting Rule 57CC, which provides for collection of certain amount at a certain percentage under the circumstances mentioned therein. As the DR rightly points out that the provisions of Rule 57D cannot negate the provisions of the preceding Rule 57CC. 10. That apart, the appellants' contention that Sulphuric Acid produced by them is only a by-product and therefore the various decisions of the Tribunal are applicable has to be carefully examined. The appellants consciously exploit sulphur dioxide, that emanates during the process of manufacture of zinc by converting it into sulphuric acid for commercial purposes. It is more of a subsidiary product then a by-product. The Supreme Court in the case of Commissioner of Sales Tax Bombay v. Bharat Petroleum Corporation Ltd. [1995 (77) E.L.T. 790] held that where a subsidiary product is turned out regularly and continuously in the course of a manufacturing business and is also sold regularly from time to time, an intention can be attributed to the manufacturer to manufacture and sell not merely the main item manufactured but also subsidiary products. It is difficult to accept the contention that Sulphuric Acid is a by-product. T ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
