Subscription   Feedback   New User   Login      
Tax Management India .com
TMI - Tax Management India. Com
Articles Highlights TMI Notes SMS News Newsletters Calendar Imp. Links Database Experts Contact us More....
Extracts
Home List
← Previous Next →

The Commissioner of Central Excise Versus M/s. Advance Detergents Ltd., Customs, Excise and Service Tax Appellate Tribunal

Denial of MODVAT Credit - exemption in terms of Notification No.8/96-CE dated 23.7.1996 and Notification No.4/97-CE dated 1.3.97 - Whether Tribunal order is correct in rejecting the recovery of Modvat Credit attributable to the inputs relating to final product cleared under the exempted category under Rule 57C of Central Excise Rules, 1944 - Held that:- Insofar as Rule 57D is concerned, the very language of Rule 57D makes it clear that credit of duty shall not be denied or varied on the ground t .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ct, as has been held in the decision of the Supreme Court and assuming it is a waste, refuse or by-product, it is chargeable to nil rate of duty, Rule 57D provides for taking credit.

There is yet another factor which needs to be considered is that part of the Spent Sulphuric Acid, which is a by-product in the manufacture of the final product, namely, Acid Slurry, is cleared on payment of duty and part of it is cleared at nil rate of duty under Chapter X procedure in terms of Notificat .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

- Dated:- 18-6-2015 - R. Sudhakar And K. B. K. Vasuki,JJ. For the Appellant : Mr. A. P. Srinivas For the Respondents : Mr. P. R. Renganath for M/s. Raghavan JUDGMENT ( Delivered By R. Sudhakar, J.) Aggrieved by the order passed by the Tribunal in dismissing the appeal filed by the Revenue, the Revenue/appellant is before this Court by filing the present appeal. This Court, vide order dated 06.02.2007, while admitting the appeal, framed the following substantial question of law for consideration: .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ar Alkyl Benzene and Sulphuric Acid. In the course of manufacture of Acid Slurry, Spent Sulphuric Acid is obtained as by-product. The assessee had cleared Spent Sulphuric Acid partly on payment of duty and partly under exemption in terms of Notification No.8/96-CE dated 23.7.1996 and Notification No.4/97-CE dated 1.3.97. The Department invoking Rule 57C alleged that the credit of duty taken on the inputs was not admissible if the final product was cleared at 'nil' rate of duty and hence .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

to be expunged as per Rule 57C of the Central Excise Rules, 1944. 3. Aggrieved by the said order of the Original Authority, the assessee filed an appeal before the Commissioner (Appeals) contending that the Spent Sulphuric Acid was a by-product and not final product and it was cleared partly on payment of duty and partly without payment of duty in accordance with the procedure prescribed under Chapter X by invoking Notification No.8/96-CE dated 23.7.1996 and Notification No.4/97-CE dated 1.3.97 .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

n the Spent Sulphuric Acid, which has been cleared without payment of duty by availing exemption under Notification 8/96-CE dated 23.7.1996 and Notification No.4/97-CE dated 1.3.97, the Commissioner (Appeals), by placing reliance on the decisions in the case of Tamil Nadu Industrial Explosives Ltd. (1996 (14) RLT 479) and in the case of Sarchem Surfactanta Pvt.Ltd. (1996 (87) ELT 105), held as follows: "5. As regards whether credit of duty is required to be reversed in respect of Sulphuric .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

r not such waste, refuse or by-product is exempt from the whole of the duty of excise leviable thereon or is chargeable to nil rate of duty or is not specified as final product under Rule 57A. In view of the above specific provisions, credit of duty cannot be denied in respect of Sulphuric Acid which was used in the manufacture of Acid Slurry and during the course of such manufacture Spent Sulphuric Act was obtained as a by-product. Therefore, the credit of duty disallowed by the lower authority .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

s is contained in any waste, refuse or by-product arising during the manufacture of final product whether or not such waste, refuse or by-product is exempt from the whole of duty of excise leviable thereon or is chargeable to nil rate of duty." 6. Aggrieved by the above-said order of the Commissioner (Appeals), the Revenue preferred an appeal before the Tribunal. Before the Tribunal, both the Department as well as the assessee conceded that the issue has been covered by the decision of the .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

n so far as the SS Acid is concerned, it is now settled that it is an excisable by-product emerging in the process of manufacture of excisable final product and, therefore, input duty credit is not deniable in relation to SS Acid vide the Tribunal's larger bench decision in Collector Vs. Keti Chemicals, 1999 (113) ELT 689, and the Allahabad High Court's decision in Varuna Sulphanators (supra) was followed by the Tribunal in Southern Petrochemical Industries Vs. CCE Madras, 2002 (148) ELT .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ue's appeals, which are dismissed." 6. Following the above decision we sustain the impugned orders and reject the appeals of the Revenue." 7. Aggrieved by the order of the Tribunal, the Department is before this Court by filing the present appeal raising the above-mentioned question of law. 8. Mr.A.P.Srinivas, learned Standing Counsel appearing for the appellant submits that the Spent Sulphuric Acid is a final product and is marketable and therefore, no credit of duty should be all .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

d that the issue is covered by the decision of the Tribunal, the Department cannot now claim that credit availed by the assessee was not admissible. Further more, in the case of Union of India V. Hindustan Zinc Ltd., the Supreme Court held that Sulphuric acid was only a by-product and the conversion of sulphur dioxide to sulphuric acid could not elevate sulphuric acid to the status of final product and hence, the assessee is entitled for Modvat Credit. 10. Heard learned Standing Counsel appearin .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

n the case of Union of India v. Hindustan Zinc Ltd. 2014 (303) ELT 321 (SC), while dealing with the entitlement of the assessee to Modvat/Cenvat Credit for the use of inputs in the manufacture of final products which are exempt or subject to nil rate of duty, held as follows: 16. Before we advert to the interpretations of the aforesaid provisions and to discuss the argument of the Union of India as to whether literal interpretation is to be given to Rule 57CC, it would be necessary to understand .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

t for the production of sulphuric acid. It was argued by the learned Counsel for the respondents, which could not be disputed by the learned Solicitor General, that emergence of sulphur dioxide in the calcination process of concentrated ore is a technological necessity and then conversion of the same into sulphuric acid as a non-polluting measure cannot elevate the sulphuric acid to the status of final product. Technologically, commercially and in common parlance, sulphuric acid is treated as a .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

that the ore concentrates (Zinc or Copper) are completely utilised for the production of zinc and copper and no part of the metal, zinc or copper forms part of the sulphuric acid which is cleared out. It was submitted that the extraction of zinc from the ore concentrate will inevitably result in the emergence of sulphur dioxide as a technological necessity. It is not as though the respondents can use lesser quantity of zinc concentrate only to produce the metal and not produce sulphur dioxide. .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

 

 

 

 

 

what is new what is new
  ↓     Update Alerts     ↓  


|| Home || Acts and Rules || Notifications || Circulars || Schedules || Tariff || Forms || Case Laws || Manuals ||

|| About us || Contact us || Disclaimer || Terms of Use || Privacy Policy || TMI Database || Members || Site Map ||

© Taxmanagementindia.com [A unit of MS Knowledge Processing Pvt. Ltd.] All rights reserved.

Go to Mobile Version