TMI Blog2023 (8) TMI 121X X X X Extracts X X X X X X X X Extracts X X X X ..... S LTD. involving the same issue and questions, was entirely at his receiving end and was not in a position to dispute the position of law emerging from the said decision, which holds the field. Thus, no question of law much less any substantial question of law can be said to be arising. The proposed substantial questions of law are already considered, decided and answered - appeal dismissed. - R/TAX APPEAL NO. 196 of 2023 - - - Dated:- 31-3-2023 - HONOURABLE MR. JUSTICE N. V. ANJARIA And HONOURABLE MR. JUSTICE NIRAL R. MEHTA MR NIKUNT K RAVAL ( 5558 ) FOR THE APPELLANT ( S ) NO. 1 MR. MIHIR JOSHI , SR. ADV. WITH MR. NISARG DESAI FOR GANDHI LAW ASSOCIATES ( 12275 ) FOR THE OPPONENT ( S ) NO. 1 ORDER ( PER : HONOURABLE MR. JUSTICE N. V. ANJARIA ) Heard learned advocate Mr. Nikunt Raval for the appellant revenue and learned senior advocate Mr. Mihir Joshi assisted by learned advocate Mr. Nisarg Desai for Gandhi Law Associates for the respondent. 2. The present Tax Appeal is directed against order dated 20.12.2021 passed by the Central Excise and Service Tax Tribunal, West Zone, Ahmedabad Bench. Thereby, the Tribunal dismissed the appeal and uph ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... appeal was allowed with consequential relief. It was held that the respondent was not required to pay any amount under Rule 6 of the CENVATE Credit Rules in respect of the credit of duty availed on input and input services attributed to manufacture of exempted clearance of LPG. 3.5 Thereafter, the appellant department preferred appeal before the Central Excise and Service Tax Tribunal, which came to be rejected on 20.12.2021 to become the order impugned in the present appeal. 3.6 In the present appeal the appellant has raised the following questions proposed as substantial questions of law, (i) Whether the Appellate Tribunal was right in law in granting relief without taking cognizance of the provisions of Rule 6 of CENVAT Credit Rules, 2004 on admissibility of CENVAT Credit and holding that the provisions of Rule 6 of the CENVAT Credit, 2004 are not applicable to exempted clearance of LPG, which was produced as joint petroleum product with other dutiable petroleum product by chemical reaction/fraction of common blend of raw material? (ii) Whether the Appellate Tribunal was right in holding that the Respondents not required to pay any amount under Rule 6(3) of CEN ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Liquefied Petroleum Gases as a byproduct of petroleum refinery and not as a joint product with other petroleum products that emerge by chemical reaction/ fraction of common blend of raw material? 5. Noticeably, substantial questions of law which were subject matter in Tax Appeal No. 219 of 2022 and those framed in the present appeal, are same and nearly identical. In the Tax Appeal No. 219 of 2022 , the Division Bench of this court held that the question whether the LPG is by-product or not, has come an academic issue in view of the decisions of the supreme court in CCE vs. National Organic Chemical Industries Limited [2008 (232) ELT 193 (SC)] and Swadeshi Polytex Ltd. vs. CCE [1989 (44) ELT 794 (SC)]. 5.1 It would be relevant to extract the relevant discussion from judgment dated 5.5.2022 in Tax Appeal No. 219 of 2022, 13. In the case of Sterling Gelatin (Supra), the assessee therein had availed credit on hydrochloric acid, which was used in the manufacture of dutiable final product viz. gelatin as well as in the manufacture of exempted goods viz. Di-Calcium Phosphate. The issue before the Court was whether the assessee was required to pay an amount of 8%/10% of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s been submitted that common input Hydrochloric Acid was used in the manufacture of both Gelatin as well as Di-Calcium Phosphate hence, in the light of the provisions of Rule 6(2) of the Cenvat Credit Rules, 2002, the respondent was required to maintain separate accounts for receipt, consumption and inventory of input meant for use in the manufacture of dutiable final products and the quantity of input meant for use in the manufacture of exempted products and take cenvat credit only on that quantity of input which was intended for use in the manufacture of dutiable goods. In the present case, the assessee has taken cenvat credit only on that quantity of input, which was intended for use in the manufacture of dutiable goods, therefore, also the question of invoking sub-rule (2) of Rule 6 of the Rules would not arise. 14. It can be seen from the aforesaid extract that this Court did not rule out the applicability of Rules 6(1) and 6(2) of the CCR on the ground that the exempt product was a by-product, but has done so by observing that the assessee could not have used a lesser quantity of inputs and inputs for manufacture of its dutiable final product. 15. It is further s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the duty paid on the inputs could be denied was only where the final products were wholly exempt from the duty of excise or chargeable to nil rate of duty. In the present case, the excisable goods, namely, polyester fibre were not wholly exempt from duty nor chargeable to nil rate of duty. It cannot be read in the notification that the notification would not be available in case non-excisable goods arise during the course of manufacture. In fact, the Tribunal seems to have erred in not bearing in mind that exemption notification was pressed in service in respect of polyester fibre which is excisable goods and not in respect of methanol which arises as a byproduct as a part and parcel of chemical reaction. It appears further on a comparison of the Rule 56A and the Notifn. No. 201/79 that these deal with the identical situation 22. In our opinion , the same analogy and reasoning would apply when the methanol arises as a result of chemical reaction and not as a result of any byproduct. In the instant case, the methanol was non-excisable. Just because methanol arises as a part and parcel of the chemical reaction during the process of manufacture, it cannot be said that methanol w ..... X X X X Extracts X X X X X X X X Extracts X X X X
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