TMI Blog2022 (6) TMI 555X X X X Extracts X X X X X X X X Extracts X X X X ..... dit availed in view of the fact that the steam generated is exempt? - HELD THAT:- In the case of M/S BALRAMPUR CHINI MILLS LTD. THROUGH ITS GENERAL MANAGER VERSUS UNION OF INDIA, MINISTRY OF FINANCE DEPARTMENT OF REVENUE [ 2019 (5) TMI 972 - ALLAHABAD HIGH COURT] , it was enunciated that Bagasse/ Press mud produced during the course of manufacture of sugar cannot be treated as exempted products and the provision of Rule 6 of Central Excise Rule, 2004 cannot be applied - In the instant case steam is generated in the course of manufacture and it cannot be said that the appellants have manufactured steam which is an exempt product. Hon ble Gujarat High Court in the case of COMMISSIONER OF C. EX. CUSTOMS, VADODARA-I VERSUS STERLING GELATIN [ 2010 (9) TMI 857 - GUJARAT HIGH COURT] held that a bye product emerging in the course of manufacture cannot be treated as a manufactured product for the purposes of Rule 6 of Cenvat credit Rules. Nothing survives in the impugned order and the same cannot be sustained - Appeal allowed - decided in favor of appellant. - EXCISE APPEAL No.167 of 2011 - FINAL ORDER No. 40213 / 2022 - Dated:- 9-6-2022 - MS. SULEKHA BEEVI, MEMBER (JUDICIAL) AND ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... i Gayatri Iron Steel (P) Ltd. Vs CCE Hyderabad 2016 (340) ELT 724 (Tri.-Hyd.) (x) CCE Raipur Vs Jayaswal Neco Idustries Ltd. 2018 (14) G.S.T.L 20 (Chhattisgarh) (xi) CCE Allahabad Vs Hi-Tech Carbon 2018 (17) G.S.T.L 398 (All.) (xii) SKI Carbon Black (India) Private Ltd. Vs CCE Chennai II 2018 (5) RMI 1416-CESTAT Chennai 4. Learned Authorised Representative Ms. Sridevi Taritla appearing on behalf of the department reiterates the findings in the impugned order. 5. The brief issues that requires our consideration in the present case is as to whether the appellants are eligible to avail Cenvat credit on the pollution control equipment in terms of Cenvat Credit Rules and as to whether the appellants are required to reverse 10% of the Cenvat credit availed by them on other inputs for the reason that the steam generated is an exempted product. 6. Coming to the issue of availability of Cenvat credit on the capital goods i.e. pollution control equipment, we find that the Hon ble Apex court in the case of Rajasthan Spinning Weaving Mills Ltd. 2010 (255) ELT 481 (SC)has held as follows: 13 . Applying the user test on the facts in hand, we have no hesita ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nufacture of dutiable final products and the quantity of inputs meant for use in the manufacture of exempted goods and take Cenvat Credit only on that quantity of inputs which is intended for use in the manufacture of dutiable goods. Sub-rule (3) of Rule 6 makes provision for the conditions which a manufacturer of goods opting not to maintain separate accounts is required to follow. 8 . Thus, on a plain reading sub-rule (1) of Rule 6, it is apparent that CENVAT credit is admissible in respect of the inputs used in the manufacture of dutiable goods and is inadmissible on such quantity of inputs which is used in the manufacture of exempted goods. Sub-rule (2) imposes an obligation on the manufacturer who manufactures final products and exempted goods from the common input to maintain separate accounts for receipt, consumption and inventory of inputs. Examining the applicability of the aforesaid rules to the facts of the present case, as noted hereinabove, it is not as if more quantity of Hydrochloric Acid is used than that required for manufacturing Gelatin or that by using a smaller amount of Hydrochloric Acid, the production of Mother Liquor could be averted. In the manufact ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the same goods had simultaneously been used in the manufacture of ethylene and propylene. The emergence of ethane and methane therefore, by itself, was not a ground to deny the benefit of the exemption notification. 10 . In the facts of the present case, it is not as if by using a smaller quantity of input Hydrochloric Acid, the respondent could have averted the emergence of Mother Liquor. In other words, in the technology utilized by the respondent for the manufacture of Gelatin, the emergence of Mother Liquor was inevitable. Hence, while it is no doubt correct to say that Hydrochloric Acid has been used in or in relation to manufacture of Mother Liquor, the identical quantity of the same goods has simultaneously been used in the manufacture of Gelatin. The emergence of Mother Liquor during the course of manufacture of Gelatin, therefore, by itself is not a ground to invoke the provisions of Rule 6 of the Rules. 8. Further, we also find that this Bench, while dealing with a case involving similar facts, in the case of SKI Carbon black (India) Private Ltd. Vs CCE Chennai II - 2018 (5) TMI 1416-CESTAT Chennai has observed as follows: 4. Heard both sides. We have giv ..... X X X X Extracts X X X X X X X X Extracts X X X X
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