TMI Blog2023 (11) TMI 1070X X X X Extracts X X X X X X X X Extracts X X X X ..... ling in clause (1) are also to be considered as exempted goods. As per the settled decisions, the disputed goods which are not consciously manufactured by the appellant and which emerged unavoidably in the process of manufacture of other goods cannot be considered as goods manufactured by the appellant. Since disputed goods is not manufactured goods but the by-product which emerges/comes into existence in the process of manufacture of copper products, and therefore the production of Sulphuric Acid cannot be held to be manufacture of exempted goods. From para 3.7 of Chapter 5 of Circular dtd. 25.04.2016, it is clear that any input/input services contained in any by-product/waste/refuse, Cenvat Credit cannot be varied or denied. With this statutory clarification demand under Rule 6 in respect of by-product is not applicable - Once it is established that the product in question is by-product then it is settled that in respect of by-product demand under Rule 6 will not sustain. Accordingly, in the present case also, Sulphuric Acid being a by-product, no demand under Rule 6 shall sustain. Appeal of assessee allowed. - HON'BLE MEMBER (JUDICIAL), MR. RAMESH NAIR And HON& ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... id clearances of goods made to units other than 100% EOU at NIL rate of duty do not fall within the scope of excluded category specified under sub-rule (6) to Rule 6 of the Cenvat Credit Rules 2004. During the disputed period appellant also sold such sulphuric acid on payment of excise duty and also sold without payment of excise duty under exemption of Sr. No 86 of the Notification No. 12/2012-CE dtd. 17.03.2012 for use in the manufacture of fertilizers. Accordingly the appellant was liable to either pay an amount equal to 5%/6%/8% /10% of the value of exempted goods viz. Sulphuric Acid under Sub-rule 3(i)of Rule 6 of CenvatCredit Rules (CCR) , 2004 or follow the option provided under the amended Rule 6 (3)(ii) of CCR, 2004 or follow the option provided under amended Rule 6(3)(iii) of CCR, 2004. In the aforesaid circumstances, the appellant were issued a total 21 show cause notices covering the period from Jul 2005 to 2015, proposing demand in terms of provisions of Rule 6 of Cenvat Credit Rules 2004 read with Rule 14 of the Cenvat Credit Rules 2004. The above 21 Show cause notice were adjudicated by the Ld. Commissioner vide ORDER-IN- ORIGINAL No, BHR-EXCUS-000-COM-001-024-16-17 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ds rescinded by the Board by circular dtd. 07.07.2022. The fact that Sulphuric Acid is a by-product in manufacture of copper cathodes is established in the Appellant s own case, by the Hon ble Supreme Court in Judgment reported as Union of India Vs. Hindustan Zinc Ltd. 2014(303)ELT 321 (SC). The same is not in dispute by the department and stands accepted by the Ld. Commissioner in impugned order as well. This is also evident from the fact that in the Department s Appeal, the department has not challenged the portion of the Order dtd. 27.05.2016 where demand for the period prior to 01.03.2015 is dropped after observing that sulphuric acid is a by-product. In fact, the same view has also been followed by Tribunal in Appellant s own case in Final Order No. A/11215-11218/2023 dtd. 08.06.2023. 6. He further submit that only contention of the department is that in view of Explanation 1 inserted to Rule 6 (1) of the Cenvat Credit Rules, 2004 w.e.f. 01.03.2015 read with Board Circular dtd. 25.04.2016, Sulphuric Acid arising as a by-product is also required to be considered as exempted goods for the purpose of Rule 6 of the Cenvat Credit Rules, 2004. The Explanation inserted w.e.f. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... luminium Co. Ltd. -1995 (77) ELT 268 (SC) 9. Shri P.K. Rameshwaram, Ld. Additional Commissioner appearing for the Revenue, as regard the appellant appeals, reiterates the findings of the impugned orders and for department s appeal he reiterates the grounds of appeal of department. 10. Shri Rameshwaram further submits that in view of the Explanation I, inserted w.e.f. 01.03.2015, provided under Rule 6(1) of the Cenvat Credit Rules, 2004, and clarification by the board vide its Circular dtd. 25.04.2016 (Supra), any by-products or waste, which are non-excisable goods but are cleared for a consideration from the factory, need to be treated like exempted goods for the purpose of reversal of credit on input and input services, in terms of Rule 6 of the Cenvat Credit Rules, 2004. In the present case, the Sulphuric Acid, emerging during the process of emanating Sulphur Dioxide gases during the smelting of the Copper Concentrate and cleared by the assessee for a consideration, is to be treated as the exempted product as the same is very much covered under the meaning provided under the Explanation I of Rule 6(1) of the Cenvat Credit Rules, 2004. 11. We have carefully considere ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... llowing options as applicable to him, namely :- (i) the manufacturer of the goods shall pay an amount equivalent to five per cent of the value of the exempted goods and the provider of output service shall pay an amount equal to six per cent of the value of the exempted services; or (ii) . 12. The Union of India amended Cenvat Credit Rules, 2004 with effect from 1-3-2015 by inserting [Explanations 1 and 2 in Rule 6(1), which reads as under :- Explanation 1. - For the purposes of this rule, exempted goods or final products as defined in clauses (d) and (h) of rule 2 shall include non-excisable goods cleared for a consideration from the factory. Explanation 2. - Value of non-excisable goods for the purposes of this rule, shall be the invoice value and where such invoice value is not available, such value shall be determined by using reasonable means consistent with the principles of valuation contained in the Excise Act and the rules made thereunder. 13. A perusal of Rule 6(1) clearly shows that the manufacturer has to manufacture dutiable goods as well as exempted goods. It has to be seen that though the said explanation puts forward a deeming provisi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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