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TMI Blog2015 (10) TMI 1559X X X X Extracts X X X X X X X X Extracts X X X X ..... de etc. These gases are at very high temperature and it is possible to recover the heat from these gases and use the same. Therefore, these gases called blast furnace gases can be sold. The appellants are selling these gases to the neighbouring unit which manufacturers cement. 2. Rule 6 of the Cenvat Credit Rules,2004,(CCR) prescribes the obligations of Manufacturer of dutiable and exempted goods and provider of taxable and exempted services. It prescribes how a manufacturer of dutiable and exempted goods will take credit of input duties. This rule restricts the availability of credit under certain circumstances. 3. The appellants are manufacturing steel products which are excisable products. They are also clearing blast furnace gases to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... es not change and production of by product is inevitable, it cannot be said that the inputs have been used for the production of the byproducts. In other words it was claimed that byproducts are manufacturered as a unintentional consequence of manufacture of dutiable final products, the quantity of inputs consumed for the manufacture of final products does not change as a result of the manufacture of the exempted byproducts. The particularly relied on the paragraph 25 of the said decision of the Apex Court, which reads as under 25. These arguments may seem to be attractive. However, having regard to the processes involved, which is already explained above and the reasons afforded by us, we express our inability to be persuaded by these su ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... issible in respect of the amount of inputs contained in any of the aforesaid waste, refuse or by-product. Similarly, CENVAT should not be denied if the inputs are used in any intermediate of the final product even if such intermediate is exempt from payment of duty. The basic idea is that CENVAT credit is admissible so long as the inputs are used in or in relation to the manufacture of final products, and whether directly or indirectly. 4.2 The appellant asserted that even the revenue recognises that no credit needs to be reversed then exempted byproducts, waste or refuse comes into existence. 5. Learned AR argued that the law laid down is very clear. The appellants are in fact manufacturing dutiable final products as well as exempted byp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... redit shall not be allowed on such quantity of input or input service which is used in the manufacture of exempted goods or exempted services, except in the circumstances mentioned in sub-rule (2). 7. We have gone through the argument on both sides. The arguments of revenue are largely based on the plain reading of the provisions of rule 6. The argument of the revenue is that a part of the inputs on which credit has been claimed are used in production of the byproduct namely blast furnace gases. It has therefore been argued that credit of such quantity of inputs as are used in the production of the byproduct need to be reversed, and if that has not been done in terms of sub-rule 3 of rule 6 of CCR a certain amount needs to be reversed. The ..... X X X X Extracts X X X X X X X X Extracts X X X X
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