TMI Blog2004 (2) TMI 266X X X X Extracts X X X X X X X X Extracts X X X X ..... facture of gelatin at the very first stage, a mother liquor emerges as a waste product while washing bones with caustic soda, zinc flux and HCL; that by treating said mother liquor with lime, the by-product namely Calphor (di-calcium phosphate) emerges which attracts nil rate of duty mentioned in the Schedule to the Central Excise Tariff itself (Heading No. 23.02); that the Deputy Commissioner under Order-in-Original No. 94/DC/Offence/2002, dated 31-12-2001 has confirmed the demand under Rule 57CC/57AD of the Central Excise Rules, 1944 and imposed penalty on the ground that the inputs have been used in the manufacture of both dutiable final products as well as exempted product; that the Appeal filed by them has also been rejected by the Com ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as the process of manufacture given by the Appellants themselves, the mother liquor is treated with lime which results into emergence of calphor; that thus calphor is manufactured by the appellants as a conscious act and, therefore, it cannot be termed as a by-product merely on the ground that in the Registration Certificate issued by the Superintendent the product is mentioned as by-product; that it has been held by the Supreme Court in the case of Commissioner of Sales Tax, Bombay v. Bharat Petroleum Corpn. Ltd. [1995 (77) E.L.T. 790 (S.C.)] that where the subsidiary product is turned out regularly and continuously in the course of manufacturing business and is also sold regularly from time to time, an intention can be attributed to the m ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ch results into manufacture of Calphor which is di-calcium phosphate attracting nil rate of duty under Heading No. 23.02 of the Tariff. From the process of manufacture, which has not been controverted by the Revenue, it is apparent that mother liquor emerges as a by-product and as a conscious act of the Appellants mother liquor is treated with lime to procure di-calcium phosphate, i.e. Calphor. Rule 57D of the Central Excise Rules clearly provides that credit of duty shall not be denied or varied on the ground that part of the inputs is contained in any waste, refuse, or by-product arising during the course of manufacture of the final product. In the present matter, Calphor is not a by-product which is emerging during the process of manufac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s of thermal cracking which resulted in generation of carbon black in particle form and off gases or lean gases. The Appellants therein were burning carbon monoxide content, which as a result generate the said off gases, which have been used for reason of anti-pollution laws, which result in generation of heat which was used further in the manufacturing process or was utilized for generation of high pressure steam as a by-product in the factory. The Revenue has denied the Modvat credit on the inputs used in the manufacture of steam as steam was exempted from payment of duty. The Tribunal has held that the generation of offgases is nothing but a by-product in the process of manufacture of carbon black and no doubt the steam has been generate ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
