TMI Blog2007 (10) TMI 185X X X X Extracts X X X X X X X X Extracts X X X X ..... This appeal has been filed against the Order-in-Appeal No. 59/2006 (G) C.E. dated 10-4-2006 passed by the Commissioner of Customs and Central Excise (Appeals), Guntur. 2. The appellants are the manufacturers of Rice Bran Oil and Refined ms. Rice Bran Oil by using the solvent extraction method. In the course of the manufacture of the above products certain by-products also arise. They are acid oil and wax. The appellants used a common input, which is known as Caustic Soda Lye. The appellants take credit on the common inputs. They do not maintain separate account in respect of the inputs used in their dutiable products and exempted products. Rice Bran Oil is dutiable whereas no duty is paid on acid oil and wax. Therefore, th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nvat Credit Rules, 2002/Rule 57CC of Central Excise Rules, 1944 would apply if two final products emerge out of use of common inputs are excisable and one of them is exempted irrespective of the fact whether the exempted product is intended manufacture or unintended by-product. According to the learned departmental representative, the issue is squarely covered by the above mentioned decision of the Larger Bench and therefore, the appellants are liable to pay 8%/10% of the sale value of the exempted products. This is the main thrust of the learned SDR's argument. 4.1 On the other hand the learned Advocate cited quite a few rulings of the Tribunal which held that Rule 57CC which is pari materia with the present Cenvat Credit R ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in cases wherein it was held that the Rule 6 of the Cenvat Credit Rules would not be applicable in respect of the by-products. The said cases are M.K Agrotech (P) Ltd. . CCE, Mysore - 2007 (211) E.L.T. 550 (T); Copy of the Final Order No.1987 dated 28-11-2006 in the case of M/s. Ravindra Solvent Oils Pvt. Ltd.; M/s. JSW Steel Ltd. v. CCE - 2006 (204) E.L.T. 313 (T) = 2006 (4) S.T.R. 481 (T); JSW Steel Ltd v. CCE - 2006 (205) E.L.T. 896 (T). Reliance was also placed on the decision of the Tribunal in the case of CCE v. Rajaram Solvex Ltd . - 2006 (200) E.L.T. 606 (T). 4.2 It was further pointed out by the learned Advocates that the appellants had reversed the entire credit attributable to the exempted products alo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ntio ., etc. However, one thing is clear that the i of question before the Larger Bench was whether Rule 6 would be applicable to the present final product as well as the by-product. The Larger Bench answered the question by saying that whether a product is a by-product or final product, Rule 6 would be applicable. We do not want enter into a discussion of the same. However, we note that the question before the Larger Bench was not whether reversal of credit attributable to the exempted product would mean not taking the credit at all. This issue was not put up before the Larger Bench and this issue was not decided by the Larger Bench in the Rallies case (supra). However, we note that Supreme Court in the case of Chandrapur Magnet Wir ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... F. No. 267/58/2001-CX.8 Government of India Ministry of Finance (Department of Revenue) Central Board of Excise Customs, New Delhi . Subject Recovery of 'amounts' which are not duty paid under the provisions of Rule 6 of the Cenvat Credit Rules, 2001 (Rule 57CC of the erstwhile Central Excise Rules, 1944) - clarification regarding. I am directed to say that a doubt has been raised regarding legal provisions for recovery of amount not paid by an assessee in terms of the provisions of Rule 6 of the Cenvat Credit Rules, 2001 (Rule 57CC of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ns may be suitably informed. 5. Hindi version will follow. 4.4 In the present case, it is not in dispute that the appellant had re versed the entire credit along with interest attributable to the exempted products. Therefore, following the ratio of the Chandrapur Magnet Wires case (supra), we hold that the appellants had not taken any credit at all in view of the reversal. If it is held that the appellants had not taken any credit of the inputs used in the exempted product, then Rule 6 would not be applicable. If Rule 6 is not applicable, the appellant is not required to pay 8% or 10% of the sale value of the ex empted products. In view of the above observations, we set aside the impugned order and allow the appea ..... X X X X Extracts X X X X X X X X Extracts X X X X
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