2006 (2) TMI 642

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..... ipur, dated 22.02.2005, which had decided that the exempted by-products, namely, "Acid Oil, De-oiled cake and GAD" emerging during the manufacture of the declared final product, namely, Solvent extracted edible refined oil, would call for discharging 8% of the sale price of such exempted final products in terms of explanation to Rule 6(3)(b) of CENVAT Credit Rules, 2002. In the impugned order, the Commissioner observed thus : "The assessees have contended that the said exempted goods emerge as inevitable by-products during the course of manufacture of solvent extracted edible refined oil. They further contest that the by products cannot be termed as exempted final products. I do not find any force in the contentions of the a .....

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..... rds like "exempted goods" and "dutiable final products". According to him, no such distinction of "final product" could be made out under these provisions as, according to him, all products which arise out of such manufacture, should be strictly treated at par as "final products" irrespective of their being loosely referred to as "by-products". 5. The learned counsel had earlier relied upon a compilation of instructions issued by CBEC on 31.08.2001. Chapter V para 3.9 of the said compilation, reads as follows : "3.9 CENVAT credit shall be admissible in respect of the amount of inputs contained in any of the aforesaid waste, refuse or by product Similarly, CENVAT should not be denied i .....

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..... to use a lesser quantum of the ethylene glycol to prevent methanol from arising for producing a certain quantity of polyester fibre. Thus, the quantity of ethylene glycol required to produce a certain quantum of polyester fibre is determined by the chemical reaction. It may be mentioned herein that it is not as if the appellants have used excess ethylene glycol wantedly to produce the methanol. It is clear that the appellants are not engaged in the production of methanol but in the production of polyester fibre." 7. It has been contended by the authorized representative of the Department that no final products could be distinguished as "main products" or "by-products" as no such distinction has been envisaged unde .....

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