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2010 (2) TMI 396 - CESTAT, NEW DELHICenvat Credit- The appellants use SS flats as primary raw materials for manufacture of cold rolled patta/patti falling under sub-heading 7219.90. The said scrap is being treated by the Department as SS scrap and sought to be classified under sub-heading 7204.21 which attracted nil rate of duty as per the tariff till 28th February, 2005 and thereafter exempted by Notification No. 3/2005-C.E., dated 24th February, 2005. The original authority held that the appellants are manufacturing dutiable SS cold rolled patta/patti and exempted SS scrap and that they have not maintained separate accounts in respect of SS flats which go into manufacture of exempted SS scrap and therefore, they are required to pay the amounts in terms of Rule 6(3)(b) of Cenvat Credit Rules, 2004. Accordingly, he confirmed the duty and interest and imposed penalties. The orders of the original authority stand upheld by the Commissioner (Appeals). Held that- Waste and the scrap have arisen in an integrated process and the entire inputs of SS flats stands utilised for the purpose of manufacture of SS cold rolled patta/patti. This fact is not in dispute. The scrap has arisen only as a by-product. The ratio of the decision of the Tribunal in the case of Narmada Gelatines Limited and the decision of the Hon’ble Bombay High Court in the case of Rallis India Limited will apply to the facts of the present case. In view of the above, the orders of the Commissioner (Appeals) are set aside and the appeals are allowed with consequential relief as per law.
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