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2016 (1) TMI 884 - AT - Central ExciseDuty demand - cenvat credit - clearance of slag/dust cleared without payment of duty - Held that:- As from reading of sub-rule (2) and sub-rule (3) of Rule 6, it is clear that sub-rule (3) is applicable only when die provisions of sub-rule (2) are not complied with by a manufacturer. In this case, in course of manufacture of MS Ingots, slag dust arises as an inevitable by-product and in the present case, even if manufacturer, in accordance with the provisions of Rule 6 (2), wants to maintain separate account or inventory of inputs/input services used in the manufacture of dutiable product - MS ingots and take credit only in respect of inputs and inputs services used in the manufacture of MS ingots, this is impossible a slag emerges as an inevitable and unavoidable by-product. Separate account and inventory as per the provisions of Rule (2) can be maintained only when a manufacturer using common inputs/input services consciously manufactures final products one dutiable and other exempt in two separate processes. But complying with Rule 6 (2) is impossible where while manufacturing a product A, a product B emerges as an unavoidable by-product or as waste. Lex Non Cogit ad Impossibila is a well settled legal principle applicable in respect of taxation matters also. When it is impossible to comply with the provisions of sub-rule (2) of Rule 6, it would not be applicable. Sub-rule (3) of Rule 6 becomes applicable only when the manufacturer does not comply the provisions of sub-rule (2) and the provisions of sub-rule (3) would not be applicable in the cases where the sub-rule (2) is inapplicable. We find that same view has been taken in the case of Nirma Ltd (2012 (10) TMI 138 - GUJARAT HIGH COURT), case of Rallis India Ltd (2008 (12) TMI 46 - HIGH COURT BOMBAY ) and Hindustan Zinc Ltd. (2014 (5) TMI 253 - SUPREME COURT ). Therefore, the appellant are not liable to pay any amount in respect of clearance of slag/dust which has been cleared by them without payment of duty as same has been emerged during the course of manufacture of M.S. Ingots. - Decided in favour of assessee.
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