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2017 (7) TMI 677 - CESTAT NEW DELHICENVAT credit - exempted goods - by-product, silver - The Revenue entertained a view that silver being an exempted product, the Cenvat credit attributable to inputs and input services used in the manufacture of such silver should be reversed in terms of provisions of Rule 57AD/Rule 6, as applicable during the relevant time - Held that: - It is apparent that the legal provisions applicable to the facts of the present case are clear to the effect that Cenvat credit attributable to inputs used in or in relation to manufacture of exempted goods is to be reversed. The relevant point to note here is that the Revenue itself categorically admitted in the appeal that it is not a case here, where common inputs are used both for the manufacture of dutiable and exempted goods in two separate processes. Segregation of quantity of inputs which is attributable to dutiable and exempted goods in an integrated process is not possible. The Revenue further admitted that quantification of proportionate quantity of input used in exempted goods is not possible in the case like the present one - We find no legal basis for the assertion made by the Revenue to arrive at the proportion of Cenvat credit to be reversed, should be based on value of exempted products. In the present case, all the inputs have been put to intended use and it is not the case that some portion of input is not put into use in the manufacture of zinc and lead. This position has been admitted by the Revenue also. If such is the case there can be no input which is solely attributable to the manufacture of small quantity of by-product namely, silver. The said silver is extracted as a by-product by the respondent whose intended/main manufacturing process is aimed at manufacture of non-ferrous metal like zinc and lead. The respondent also obtain various other by-products like sulphuric acid etc. In fact with reference to sulphuric acid emerging as a by-product, it was held in the respondent’s own case that there is no need for reversal of Cenvat credit on proportionate basis in Hindustan Zinc Limited Vs. CCE, Jaipur – II [2004 (1) TMI 283 - CESTAT, NEW DELHI]. The respondents fulfilled the condition as stipulated in the Finance Act, 2010 by reversing proportionate credit in 2002-2003 itself and by paying interest on the same. We also note that the Commissioner was to verify the correctness of amount paid within a period of two months from the date of receipt of application and in case the amount so paid is less than the amount payable, he shall call upon the applicant to pay the differential amount alongwith interest which shall be paid within 10 days. Considering the legal provision, as mentioned in Section 70 of the Finance Act, 2010 and the facts of the present case, we find no infirmity in the finding recorded by the Original Authority. Appeal dismissed - decided against Revenue.
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