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2013 (10) TMI 798 - HC - Central ExciseCENVAT Credit – manufacturing of by-products exempted from duty - reversal of cenvat credit - penalty - Held that:- Credit of the duty paid on inputs used in the manufacture of dutiable goods is given under the Cenvat Credit Rules so as to prevent the cascading effect of duty - Cenvat Credit is availed in respect of duty paid on the inputs used in the manufacture of final product - At the time of clearance of the goods, the amount of credit being availed would be used for the payment of excise duty - the credit availed at the first stage would stand recovered at the time of clearance of the exportable goods - Cenvat Credit would have been availed in respect of the input Hydrochloric Acid - The entire Hydrochloric Acid having been used for the manufacture of excisable goods being Gelatin, the credit availed in respect of the inputs would be duly recovered at the time of clearance of the excisable goods being Gelatin. There is no material to suggest that the respondent manufactured any subsidiary products with an intention to market them regularly and consistently and that it was also the case of the Department that in the process of manufacturing the principal product, certain waste/by-product came into existence - the value of such waste/by-product was minuscule and that therefore also no intention can be gathered on the part of the manufacturer to manufacture and market such products as subsidiary product - the respondents have voluntarily reversed the Cenvat credit utilized for manufacturing the by-product along with interest. - no penalty - decided against the revenue.
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