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2016 (6) TMI 871 - CESTAT NEW DELHI

2016 (6) TMI 871 - CESTAT NEW DELHI - TMI - Cenvat Credit - Common inputs - emergence of exempted waste - Commissioner took the view that they are required to pay an amount at the rate of 10% / 5% of the value of exempted goods (coke fines) under Rule 6(3)(b) of the Cenvat Credit Rules 2004. - For carrying on the manufacturing operations, they manufactured “coking coal” as an intermediate product which is used to heat up blast furnace in their factory. Since coke so manufactured comes into exist .....

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having the colour of process waste. In the light of the discussions above, when inputs are contained in waste it will not attract the mischief of Rule 6(3)(b) of Cenvat Credit and there will be no requirement of paying 10% / 5% of the value of the exempted product. - Decided in favor of assessee. - Appeal No. E/1248/2011-EX(DB) - FINAL ORDER NO. 52094/2016-EX(DB) - Dated:- 8-6-2016 - MS. ARCHANA WADHWA, MEMBER (JUDICIAL) AND SHRI V.PADMANABHAN, MEMBER (TECHNICAL) For the Petitioner : Shri Amit J .....

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ducts in different forms. For carrying on the manufacturing operations, they manufactured coking coal as an intermediate product which is used to heat up blast furnace in their factory. Since coke so manufactured comes into existence in bigger sizes, they put it through a coke cutter, to reduce the size to that which is suitable for use in the blast furnace. During this process, coke fines (Coke dust) gets generated which are cleared from the factory without payment of excise duty following exem .....

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nged the impugned order of the Commissioner mainly on the ground that coke fines are not their final product, but a by-product which is a process waste coming into existence in the course of manufacture of their final product they are not required to pay 10% of the value of the exempted products under Rule 6(3)(b), a part of the input is contained in any waste, refuse or byproduct rising during the course of manufacture of final product. The erstwhile rule 57D has provided for this. CBEC issued .....

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termediate 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. The same clarification has also been incorporated in para 3 of Chapter 5 of CBEC Excise Manual of Supplementary Instructions 2005. The issue has also been held in their favour vide many decisions of the Tribunal in separate law they hav .....

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an exempted final product or process waste. It is also not in dispute that the coke fines are exempted products arising in the course of manufacture of finished products. A similar issue was examined by this Tribunal s Larger Bench in the case of Rallies India Ltd. Vs. CCE Salem-2007 (208) ELT 25 (Tri-LB) in which it was held: we are of the view that as long as two final products emerging out of use of common inputs are excisable and one of them is exempted, the provisions of Rule 57CC will appl .....

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