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2018 (5) TMI 207 - AT - Central ExciseCENVAT credit - inputs contained in the by-products - Rule 57D of the Central Excise Rules, 1944 - demand of 8% of the value of the by - products - Held that: - all the three products viz. wool grease, lanolin anhydrous and technical lanolin are generated unavoidably during the course of manufacture of final product i.e. wool tops. Therefore, all these products are by-products - From the plain reading of the erstwhile Rule 57D and sub-para (3.7) of CBEC’s Central Excise Manual, it is mandated that if any input is contained in the by - product, waste or refuse, the cenvat credit on the said quantity of inputs can not be denied. This provision is with the clear logic that the credit is available on the inputs so long as it is used in the manufacture of final product which is cleared on payment of duty. In the present case, all the inputs are used for manufacture of final product viz. wool tops which is cleared on payment of duty. However, the by - products are emerged unavoidably. Hence in the light of the above provisions, canvat credit cannot be denied on the input contained in the by - products. The provisions of Rule 57CC of the Central Excise Rules, 1944, Rule 6(2)/6(3)(b) of the Cenvat Credit Rules, 2002/2004 have no application in the facts of this case. Demand set aside - appeal allowed - decided in favor of appellant.
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