TMI Blog2012 (10) TMI 141X X X X Extracts X X X X X X X X Extracts X X X X ..... n cleared on payment of Excise duty and therefore it cannot be said that the energy saving device installed in the factory was producing only the exempted goods - the demand for CENVAT Credit availed on the capital goods cannot be sustained - in favour of assessee. Taken credit twice on the basis of same document - Held that:- As the appellants have not disputed this issue & in fact, have found much more double entries and have reversed them voluntarily. Under these circumstances, the penalty for availment of credit twice also cannot be justified - in favour of assessee. - E/228/2008 - - - Dated:- 12-9-2012 - MR.M.V. RAVINDRAN, AND MR. B.S.V. MURTHY, JJ. Represented by: Shri P.K. Sahu, Adv.: for Assessee. Shri P.N. S ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Tribunal to submit that the appellant is eligible for credit. 3. Ld.A.R., on the other hand, submits that at the time of purchase of capital goods and availing CENVAT Credit, the appellant had brought the same for manufacture of Ammonia which was used in the manufacture of fertilizers without payment of duty. The carbon dioxide was only a by-product and the capital goods were not installed for the manufacture of carbon dioxide but ammonia. 4. We have considered the submissions made by both the sides. 5. According to Rule 2 (h) of CENVAT Credit Rules, 2004, final products means excisable goods manufactured or produced from inputs, or using input service. The question to be decided is whether the provisions of sub-rule 4 of Rule 6 of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cess of ammonia to bring out the emergence of CO2 and the stage in which the same compounds. Production process of ammonia and carbon dioxide in the ammonia plant: The ammonia-producing plant first converts natural gas (i.e. methane) or petroleum naptha into gaseous hydrogen. The hydrogen and nitrogen gets converted to ammonia. Starting with a naptha/natural gas feedstock, the process used in producing the hydrogen are: Sulphur removal from feed: * The first step in the process is to remove sulphur compounds from the feedstock because sulphur deactivates the catalysts used in subsequent steps. * In case of gaseous feed, feed gas is passed through activated carbon bed, where sulphur compounds gets absorbed and removed. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... CO2 + 4H2 -- CH4 + 2H2O Ammonia Synthesis: * To produce the desired end-product ammonia, the hydrogen is then catalytically reacted with nitrogen (derived from process air) to form anhydrous liquid ammonia. This step is known as the ammonia synthesis loop (also referred to as the Haber-Bosch process): 3 H2 + N2 -- 2 NH 3 8. Thus, it can be seen that CO2 has been produced prior to, during and after the installation of energy saving device which was used for such production. A part of the production has been cleared on payment of Excise duty and therefore it cannot be said that the energy saving device installed in the factory was producing only the exempted goods. 9. As regards availment of CENVAT Credit twice on t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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