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2015 (6) TMI 778 - AT - Central ExciseReversal of cenvat credit on emergence of exempted by-product Hydrol i.e Acid Oil - Demand of 8% of the sale value of the acid oil - Non maintenance of separate account and inventory of the input/input services used in or in relation to the manufacture of exempted final products and dutiable final products - Held that:- While the main product being manufactured by the respondent i.e , refined vegetable oil being manufactured by M/s Goyal Proteins and Dextrose Monohydrate and Dextrose Anhydrous being manufactured by M/s Starch Chemicals were dutiable final products and the respondent have availed cenvat credit in respect of input/input services used in the manufacture of these dutiable final products. In course of manufacture of these dutiable final products, some by-products exempt from duty also arose. Acid oil emerges in the manufacture of refined vegetable oil and during the manufacture of Dextrose Monohydrate and Dextrose Anhydrous, a by-product viz. hydrol emerges. In these circumstances of the case, it was impossible for the Respondents to maintain separate account and inventory of the inputs/input services meant for dutiable final products and exempted final products as this can be done only if two different final products, one dutiable and the other exempted are being manufactured consciously. When compliance of a provision is impossible, an assessee cannot be penalized for his failure to comply with the same. - provisions of Rule 6(2) read with Rule 6(3)(b) of Cenvat Credit Rules, 2002/2004 would not be applicable in such cases when in course of manufacture of dutiable final products some exempted final products also emerge as inevitable by-product. - Decided against Revenue.
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