TMI Blog2015 (4) TMI 1035X X X X Extracts X X X X X X X X Extracts X X X X ..... if the MODVAT inputs are used in manufacture of both dutiable final products and exempted final products and the manufacturer has not maintained separate accounts so as to ascertain the quantum of inputs used in the manufacture of the final products. Therefore the floor sweepings/waste and scrap/hydrogen arising in the manufacture of biscuits/iron-products/oxygen, respectively will be governed by Rule 57CC if they are exempted final products and would be governed by Rule 57D if they are merely waste, refuse or by-product arising in the manufacture of dutiable final products and accordingly the Hon ble Bombay High Court allowed the writ petition of Rallis India Limited (2006 (12) TMI 162 - CESTAT, MUMBAI) holding that no duty whatsoever is p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed with synthetic resin, i.e. an aqueous chemical solution of phenol formaldehyde resin (44/45%) or solution of urea formaldehyde resins (55%) or solution of melamine Urea Formaldehyde Resin, as the case may be. The glued chips are formed into three layer mats with the help of spreading machine. The Central layer of the mat is of the core glued chips and the top and bottom layers are of face glued chips. These mats are ultimately pressed by Hydraulic Press under high pressure and temperature to manufacture plain particle boards. These boards are cut on the trimming machine into the standard size. Top and bottom surface of such boards are finally sanded. Thus during the trimming and sanding of plain particle boards the said wooden saw dust ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in the manufacture of exempted goods and take CENVAT credit on that quantity of inputs which is intended for use in the manufacture of dutiable goods. Accordingly, the revenue felt that the appellant was required to pay duty at the rate of 8%/10% on the removal of sawdust from the factory and accordingly show cause notice was issued for the period November 2001 to May 2006 for the extended period vide show-cause notice dated 4/12/2006 asking the appellant to show-cause as to why the amount of ₹ 13,04,746/- should not be recovered from it under Rule 6(3)(b) of the CENVAT credit Rules read with Rule 12 of the CENVAT Credit Rules, 2002 read with section 38A of the Central Excise Act and Rule 14 of CENVAT Credit Rules, 2004 read with Se ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that the appellant manufactured both dutiable and exempted goods (saw dust) and the availment of CENVAT credit in regard to common inputs has to be governed by Rule 6(3) of CENVAT Credit Rules, 2004. As the appellant did not maintain separate accounts for the dutiable goods alone, since it may not be possible/practicable to do so, in such a situation provisions of Rule 6(3)(b) of CENVAT Credit Rules, 2004 should apply. 5. Being aggrieved the appellant is in appeal before this Tribunal. The learned Counsel for the appellant states that the issue is no longer res integra. The appellant relies on the Division Bench ruling of this Tribunal in the case of Shree Siddherman Sahakari Karkhana Ltd. Vs. CCE, Pune-III reported in 2014-TIOL-1804 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ired in the manufcture of gelatin is beyond the scope of reference and contrary to the facts of the case on record. The Honble High Court also took notice of the ruling of the Honble Apex Court in the case of CCE Vs. Gas Authority Limited 2008 (232) ELT 7 (SC) wherein the scope of Rule 57CC was considered. In that case duty paid natural gas was used as an input in the manufacture of dutiable LPG and in the manufacturing process, Lean Gas emerged as a by-product which was cleared without payment of duty. The Revenue claimed 8% of the price charged on the sale of Lean Gasas per Rule 57CC. In that context the Honble Apex Court observed as under:- Therefore the short question which arises for determination before this Court is whether ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... maintained separate accounts so as to ascertain the quantum of inputs used in the manufacture of the final products. Therefore the floor sweepings/waste and scrap/hydrogen arising in the manufacture of biscuits/iron-products/oxygen, respectively will be governed by Rule 57CC if they are exempted final products and would be governed by Rule 57D if they are merely waste, refuse or by-product arising in the manufacture of dutiable final products and accordingly the Honble Bombay High Court allowed the writ petition of Rallis India Limited (supra) holding that no duty whatsoever is payable in the case of by-products, waste and scrap. 6. I find that in the present case also sawdust generated is waste and not a final product of the appellant. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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