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M/s. Rallis India Ltd. Versus CCE, Salem

2015 (6) TMI 432 - CESTAT CHENNAI

Duty demand under Rule 57CC - Emergence of hazardous waste emerges known as Mother Liquor during the process of manufacture of final product 'gelatin' with the help of Hydrochloric acid - Held that:- Decision in the case of appellant's own cases [2014 (5) TMI 253 - SUPREME COURT] and [2008 (12) TMI 46 - HIGH COURT BOMBAY] followed - Decided in favour of assessee. - E/1020/2005 - Dated:- 26-5-2015 - Hon ble Shri R. Periasami, Technical Member And Hon ble Shri P. K. Choudhary,JJ. For the Applicant .....

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al product hazardous waste emerges known as Mother Liquor. This liquor is treated with other chemicals and subsequently cleared without payment of duty. The department alleged that the common input HCL is used for manufacture of gelatin which is a dutiable and exempted product. The period involved in this case relates to September, 1996 to February, 2003. 3. After hearing both the sides, we find that this issue stands settled by the Hon ble Supreme Court in the appellant s own case reported in 2 .....

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etition before the Hon ble High Court of Mumbai and the Hon ble High Court in the case of Rallis India Ltd. Vs. CCE, Salem reported in 2009 (233) ELT 301 (Bom.) had set aside the LB decision dated 13.12.2004 and as well as the order in original dated 23.12.2004. The relevant portion of the Hon ble High Court order is reproduced as under:- 23. Under Rule 57C and 57D of the Central Excise Rules, 1944, credit of duty paid on HCL which is used as an input in the manufacture of gelatin cannot be deni .....

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nd as per Rule 57D, even though no excise duty is payable on the waste mother liquor arising in the manufacture of gelatin, the petitioner is entitled to avail the entire credit of duty paid on HCL which is used as input. 24. It is, however, contended by the revenue that on the introduction of Rule 57CC, the petitioner was liable to maintain separate account so as to ascertain the quantity of HCL used in the manufacture of exempted phosphoryl A and B , and since no such account was maintained th .....

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input is used in the manufacture of the exempted final product. Where separate account was not maintained or could not be maintained so as to ascertain the quantity of inputs used in the manufacture of exempted final product, there used to be difficulty in reversing the credit of duty taken on inputs used in the manufacture of exempted final product. To obviate this difficulty Rule 57CC was introduced. As per Rule 57CC, where a manufacturer manufacturing both dutiable final product as well as ex .....

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entire credit of duty paid on HCL which is used as input in the manufacture of gelatin. In other words, in the present case, the petitioner is not required to reverse the credit of duty on HCL at the time of clearance of the waste mother liquor and consequently there would not be any obligation to pay presumptive amount under Rule 57CC for not maintaining separate account. 27. The fact that the waste mother liquor arising in the manufacture of gelatin was further processed to manufacture exempt .....

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not even the case of the revenue that the waste mother liquor arising in the manufacture of gelatin is a final product. Therefore, in the facts of the present case, if Rule 57CC was not applicable at the time of clearance of waste mother liquor, then Rule 57CC would not apply at the time of clearance of the exempt phosphoryl A and B manufactured out of waste mother liquor. 32. The argument of the revenue that by demanding presumptive amount at 8% of the price of phosphoryl A and B at the time o .....

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