TMI Blog2013 (10) TMI 798X X X X Extracts X X X X X X X X Extracts X X X X ..... goods - Cenvat Credit would have been availed in respect of the input Hydrochloric Acid - The entire Hydrochloric Acid having been used for the manufacture of excisable goods being Gelatin, the credit availed in respect of the inputs would be duly recovered at the time of clearance of the excisable goods being Gelatin. There is no material to suggest that the respondent manufactured any subsidiary products with an intention to market them regularly and consistently and that it was also the case of the Department that in the process of manufacturing the principal product, certain waste/by-product came into existence - the value of such waste/by-product was minuscule and that therefore also no intention can be gathered on the part of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ts/ wastes, viz. Ridugent (Hydrol) and Corn Extractives (Corn steep Liquor, Bio Feed EZ and Bio Feed. On the premise that such byproduct/waste is exempt from payment of duty and that therefore Cenvat credit could not have been availed on the inputs used for manufacturing such goods, the adjudicating authority issued show cause notice dated 26.5.2010 and called upon the respondent why: (i) the amount of Rs.4,31,573/being equal to 10% on the value of the exempted goods cleared during the period May 09 to June 09 which was not paid by them as required under Rule 6(3)(i) of the Cenvat Credit Rules, 2004, should not be recovered from them under Rule 14 of the Cenvat Credit Rules, 2004, read with section 11A of the Central Excise Act, 1944, ( ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hich the respondent approached the Customs Excise and Service Tax Appellate Tribunal ( the Tribunal for short). The Tribunal by the impugned order dated 29.5.12 allowed the appeal and reversed the orders passed by the Excise authorities relying on the decision of the Bombay High Court in the case of Rallis India Ltd. v. Union of India, 2009 (233) ELT 301 (Bom.) and that of this Court in the case of Commissioner of C.Ex. Customs v. Sterling Gelatin, 2011 (270) ELT 200 (Guj.). Learned counsel for the Department strenuously urged before us that the decisions of the Bombay High Court and the Gujarat High Court noted above are clearly distinguishable. In the present case, the respondent assessee not only manufactured its principal product, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of this Court in the case of Sterling Gelatin (supra). Counsel further relied on the Departmental circular dated 3.4.2000 wherein it was clarified that Cenvat credit would be admissible on the part of inputs that is contained in waste or refuse or byproduct. Counsel further submitted that in the show cause itself the byproduct is referred to as waste. The Department, therefore, now cannot take a different stand and contend that such product was subsidiary product intentionally manufactured by the respondents. Counsel further relied on the decisions of this Court in the case of Commissioner of Central Excise v. Ashima Dyecot Ltd., 2008 (232) ELT 580 (Guj.) and in the case of Commissioner of Central Excise, Ahmedabad v. Maize Products, 2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... yproducts/ waste were also manufactured. The Department contended that in view of rule 6(2) of the Cenvat Credit Rules, 2004, credit for the inputs utilized for manufacturing of the byproduct would not be available since such byproduct was duty exempt. This Court examining such rule position and referring to various decisions including that of Rallis India Ltd (supra) of the Bombay High Court opined as under : 10. In the facts of the present case, it is not as if by using a smaller quantity of input Hydrochloric Acid, the respondent could have averted the emergence of Mother Liquor. In other words, in the technology utilized by the respondent for the manufacture of Gelatin, the emergence of Mother Liquor was inevitable. Hence, while it i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ired to pay duty in respect of the same input utilized by it twice over, which would apparently result in unjust enrichment to the revenue. We also had an occasion to refer to and follow the decision of this Court in the case of Sterling Gelatine (supra) in the case of Commissioner of C.Ex., Ahmedabad v.Nirma Ltd. 2012 (281) ELT 654 (Guj.). The factual ground and the statutory provisions applicable being similar, we have no hesitation in upholding the decision of the Tribunal. We may, however, clarify that in the present case, there is no material to suggest that the respondent manufactured any subsidiary products with an intention to market them regularly and consistently and that it was also the case of the Department that in the pro ..... X X X X Extracts X X X X X X X X Extracts X X X X
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