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2018 (4) TMI 755

8 - CESTAT NEW DELHI] has held that the fly ash produced during combustion of coal in the manufacture of electricity is a waste by-product. The same is not emerging out of any manufacturing process - tax liability do not arise. - CENVAT credit - rejected finished goods when the same were returned by the suppliers - Held that: - Admittedly, the finished goods cleared were on payment of duty. When they were returned back to the manufacturer they are entitled to take credit of such duty as if it is input credit in terms of Rule 16(i) of the CER 2002 - credit allowed. - Appeal allowed - decided in favor of appellant. - Ex. Appeal No.50837 of 2017 - 50975/2018 - Dated:- 14-3-2018 - Mr. Justice (Dr.) Satish Chandra, President And Mr. B. R .....

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course of generation of electricity. The lower authorities held that the said fly ash is classifiable under Chapter 26 of the Central Excise Tariff and is liable to duty 1% / 5% with the condition that no Cenvat Credit has been availed on input/ input services under Cenvat Credit Rules, 2004. The lower authorities held that the Appellants are liable to payment of duty on the consideration received on sale of such fly ash. We note that the fly ash emerging during the course of generation of electricity cannot be considered as a manufactured product liable to Central Excise duty. In this connection, the observation of the Hon ble Madras High Court in Mettur Thermal Power Station (supra) is relevant. The Hon ble High Court recorded as below: .....

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in the schedule it cannot be termed as an excisable commodity, since it satisfies the test of marketability. The twin tests have to be satisfied in order to bring a product within the ambit of excise duty and satisfaction of solitary test a lone would not be sufficient to levy excise duty on the commodity. Therefore, mere marketability of the product alone would not be suffice to levy duty on the fly ash‟, there being no manufacturing process involved. 6. The dispute in the present case is squarely covered by the findings of the Hon ble High Court, as above. Accordingly, we find no merit in the impugned order and set aside the same . 6. By following our earlier decision (supra) and considering the facts and circumstances of the case, .....

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