TMI Blog2005 (10) TMI 491X X X X Extracts X X X X X X X X Extracts X X X X ..... Dioxide is not fixed. The appellants either use this gas for producing further heat in the furnace or by burning at the tall chimney ends. Some quantity was sold by the appellants to M/s. Indorama. The product is exempt under Notification No. 76/86 dated 10-2-86. The department pointed out that since both dutiable and exempted products were being manufactured, they were required to pay 8% on selling price of the gas under Rule 6(3)(b) of Cenvat Credit Rules, 2002. The appellants paid the said amount for the period October 2000 to September 2002 on 20-4-2003 and thereafter started paying regularly. For nearly three months, they also paid duty @ 16% foregoing the exemption. Later on they filed the refund claims on the ground that the generation of Blast Furnace Gas was inevitable and could not be avoided and in view of Tribunal judgments in Gas Authority of India Ltd. v. CCE - 2001 (136) E.L.T. 1019 (Tri.) and Aarti Drugs - 2001 (133) E.L.T. 385, payment was not required and the buyer had not paid them 8% of the value and or 16% of the duty and they had not passed on the incidence of amount claimed. 3. It is contended in the appeals that - (i) The generation of the product w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ts had not complied with the provisions of Rule 6(2). Therefore an amount of 8% on the price of the said gas was required to be paid under the provisions of Rule 57AD and Rule 6(3)(b). Regarding payment of duty @ 16% it was held that the duty was paid on their volition. He also held that the incidence had been passed on to the customers. If the amount was required to be paid, it was not refundable. The claims were liable to rejection on that ground alone and the findings regarding incidence being passed on have been recorded in the impugned order because rival contentions were raised before him. Thus, the contention of the appellants that the amount was required to be sanctioned and credited to Consumer Welfare Fund, even if the incidence was held to be, passed on has no merit. 6. The first question that requires examination is whether the product Blast Furnace Gas was manufactured or was a by-product. There are two possibilities as to how the product is coming into existence. One is that the coke into furnace generates Carbon Monoxide, which reacts with the ore and gets partly converted into Carbon Dioxide. Other is that the mixture of ore and coke fed into furnace gets converte ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e analogous and are reproduced below : (1) The Cenvat credit shall not be allowed on such quantity of inputs which is used in the manufacture of exempted goods, except in the circumstances mentioned in sub-rule (2). (2) Where a manufacturer avails of Cenvat credit in respect of any inputs, except inputs intended to be used as fuel, and manufactures such final products which are chargeable to duty as well as exempted goods, then, the manufacturer shall maintain separate accounts for receipt, consumption and inventory of inputs meant for use in the manufacture of dutiable final products and the quantity of inputs meant for use in the manufacture of exempted goods and take Cenvat credit only on that quantity of inputs which is intended for use in the manufacture of dutiable goods. 10. The manufacturer opting not to maintain separate account shall follow either of the following conditions, as applicable to him, namely :- (a) if the exempted goods are - (i) - to (vii) - the manufacturer shall pay an amount equivalent to the Cenvat credit attributable to inputs used in, or in relation to, the manufacture of such final products at the time of their clearance f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er sub-rule (3). 14. The claims have also been rejected on the ground that amounts claimed as refundable had been passed on to the customers. The case of the appellants is that the customers had in fact not paid them as peri the invoices/supplementary invoices and/or had issued debit notes. It is this amount of differential duty for which the refund claims were filed. The adjudicating authority held that once the supplementary invoice had been issued or invoices had been issued showing the duty @ 8% or 16% the incidence had been passed on and subsequent issue of credit notes by the appellants/debit notes by the customers did not change that position. 15. There are conflicting judgments of the Tribunal and Courts on the issue of Tribunal in CCE, Madras v. Addison Co., 1997 (93) E.L.T. 429 was reversed by Hon ble Madras High Court in Addison Co. v. CCE - 2001 (129) E.L.T. 44 and an appeal against the same is admitted and pending in Supreme Court. The Larger Bench of the Tribunal in S. Kumar Co. - 2003 (153) E.L.T. 217 (Tri. - LB) followed the Tribunal judgment in Sangam Processors (Bhilwara) Ltd., 1994 (71) E.L.T. 989, which involved a claim of refund under Section 11C(2). ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the consequential refund would not be hit by unjust enrichment. In Sicpa India Ltd. v. CCE - 2005 (180) E.L.T. 339 the Tribunal held that the appellants were entitled to a deduction on account of discount given subsequently by way of credit note and also consequential refund. In fact the law has been settled long back in the clarificatory order of the Apex Court in Bombay Tyres - 1984 (17) E.L.T. 329 (S.C.) the law is that discounts given subsequently are allowed to be deducted from the invoice price for the purpose of assessment of duty. The law laid down by the Apex Court in Bombay Tyres case has been consistently followed by all the Courts and Tribunals and its correctness has never been doubted. Discounts have never been disallowed at least after the Bombay Tyres judgment, on the ground that they were hot given in the invoices at the time of sale/clearance. Such deferred discounts are generally given by issuing credit notes and all assessments involving deferred discounts are completed on the premise that the invoice price can be reduced by issuing a credit note. 19. Law Lexicon by P. Ramanath Iyer (2nd Edition) lists following definitions of the term Invoice. - A pa ..... X X X X Extracts X X X X X X X X Extracts X X X X
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