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2021 (8) TMI 125 - AT - Central ExciseRecovery of Central Excise Duty alongwith interest and penalty - by-product, called HMDSO generated during the manufacture of final product from the raw material - Rule 4(5) of CENVAT Credit Rules - HELD THAT:- It is clear that the appellant who is manufacturer of organic compound anti-biotic, precisely the inputs used by him is HMDS while processing such inputs, the appellant not only gets the final product, the anti biotic but also gets a by-product / waste called HMDSO - There is no denial to the fact that it is the by-product / waste (HMDSO) which has emerged with the final product (anti-biotic/ organic compound ) of the appellant from the inputs HMDS is sent to the job worker for the reason that this by-product has a potential of releasing the inputs i.e. HMDS by further recovery process as 75% of such HMDS is still contained in the said by-product i.e. HMDSO. Rule 4(5) of Cenvat Credit Rules is not applicable to the given facts and circumstances. Because what has been sent to the job worker is not the inputs as such, but the by-product emerging along with final product - there is no possibility of 100% reversal of HMDSO given to the job worker. This apparent admission that the job worker has returned the returnable yield of HMDS to the appellant from HMDSO received, within 180 days thereof - It remains unrebutted that what has been given to the job worker was the waste which emerged along with final product and not the inputs as such, used by the appellant for manufacturing anti-biotic as a final product. Rule 4(5)(a) of the Cenvat Credit Rules, 2002 does not cover the return of waste and scraps. The matter was remanded back to the Original Adjudicating Authority on the ground that test report based on which Commissioner (Appeals) has arrived at the conclusion regarding generation of waste was not available before the Original Adjudicating Authority - Appeal allowed by way of remand.
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