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2015 (4) TMI 1035 - CESTAT MUMBAI

2015 (4) TMI 1035 - CESTAT MUMBAI - 2015 (329) E.L.T. 550 (Tri. - Mumbai) - Benefit of CENVAT Credit - exemption vide Notification No. 3/2005 dated 24.02.2005 - Held that:- What 57D provides is that where MODVAT input is used in the manufacture of dutiable final product and waste, refuse or by-product arise in the process, then, even if the MODVAT inputs are contained in the waste, refuse or by-product and whether or not Excise duty is payable on such waste, refuse or by-product, the manufacture .....

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espectively 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 payable in the case of by-products, waste and scrap. - in the present case also sawdust generated is waste and not a fi .....

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e Petitioner : Ms. L. Maithili, Advocate For the Respondent : Shri Sanjay Hasija, Supdt. (A.R.) ORDER Per: Anil Choudhary: The appellant M/s Panel Board and Laminates Ltd. is engaged in manufacture of Wood Particle Board and Pre-laminated Particle Board falling under chapter Heading No. 4406.10 & 4406.90 of the Schedule to the CETA, 1985. The appellant was availing the benefit of CENVAT credit on various chemicals such as formaldehyde, caustic soda, Formic Acid, Resins etc. under the CENVAT .....

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r 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 ar .....

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tariff rate till 23/2/05 and thereafter exempted vide Notification No. 3/2005 dated 24.02.2005. The saw dust so manufactured was cleared from the factory of the appellant on commercial invoice to various parties without payment of Central duty. As the appellant have availed the facility of CENVAT credit of duty paid on the inputs/chemicals namely formaldehyde, caustic soda etc. used in the manufacture of dutiable goods, i.e., particle board and pre-laminated particle board as well as in the remo .....

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ant for use in the manufacture of dutiable final products and the quantity of inputs meant for using 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 .....

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with Rule 25 of Central Excise Rules, 2001/2002 read with Section 38A of the Central Excise Act and further why not interest be demanded. 3. The show cause notice was adjudicated, rejecting the contention of the appellant that sawdust being a waste product and not a final product, no duty under Rule 6(3) is attracted. The Joint Commissioner relying on the ruling of the Larger Bench of this Tribunal in the case of Rallis India Limited Vs. Commissioner of Central Excise - 2007 (208) ELT 25 (Tribun .....

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Rule 13 of CENVAT Credit Rules, 2002 and Rule 15 of CENVAT Credit Rules, 2004 read with Rule 25 of the Central Excise Rules, 2002. 4. Being aggrieved the appellant preferred appeal before the Commissioner (Appeals), who by the impugned order, dismissed the appeal against the order of the Joint Commissioner. The Commissioner (appeals) held 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 b .....

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Shree Siddherman Sahakari Karkhana Ltd. Vs. CCE, Pune-III reported in 2014-TIOL-1804 (Tri.-Mum) wherein this Tribunal in the case of waste products which arise in the course of manufacture of sugar, such as bagasse and compost, the Tribunal has held that the same cannot be considered as final products and therefore payment of a sum equal to 5%/6% of the price of the exempted waste is not required to be made in terms of Rule 6(3) of the CENVAT Credit Rules, 2004. The appellant also relies on the .....

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sions. The Honble High Court held that the Larger Bench committed a fundamental error in holding that HCL was not an input required in the manufacture of gelatin because, firstly that was not the question referred to it for the decision. Secondly the specific case of the Revenue as set out in the show-cause notice was that HCL was the common input used in the manufacture of two final products namely gelatin and phosphoryl A and B and since phophoryl A and B is exempted, Rule 57 CC is applicable .....

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g 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 Lean Gas was a by-product or a final product. If it is a by-product, then the assessee would be entitled to the benefit of Rule 57D. On the other hand if Lean Gas is a fina .....

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arising in the manufacture of iron products and hydrogen arising as a by-product in the manufacture of oxygen by the process of electrolysis of water. The Honble Apex Court found it difficult to accept this finding. Further what 57D provides is that where MODVAT input is used in the manufacture of dutiable final product and waste, refuse or by-product arise in the process, then, even if the MODVAT inputs are contained in the waste, refuse or by-product and whether or not Excise duty is payable .....

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