TMI Blog2005 (2) TMI 369X X X X Extracts X X X X X X X X Extracts X X X X ..... ugarcane, wherein Molasses was a by-product. They were also manufacturing 'Denatured Spirit' (SH No. 2204.10 of the CETA Schedule), 'Rectified Spirit' (SH No. 2204.90) and 'Extra Neutral Alcohol' (SH No. 2204.90) from Molasses in their Distillery Division. Out of these three products, 'Denatured Spirit' was dutiable and the other two products falling under SH No. 2204.90 were exempt from payment o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ily did during other periods when they manufactured both dutiable and exempted products. During the aforesaid periods, they had also taken Modvat/Cenvat credit on Molasses. The Department issued show cause notices to the party proposing to disallow such the Modvat/Cenvat credit taken on Molasses used in the manufacture of the exempted products, under Rule 57-I, as also to impose penalties on them ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the price of the exempted products in terms of Rule 57CC(1)/57AD. The benefit of Rule 57CC(1)/Rule 57AD was not liable to be denied merely on account of the fact that only the exempted products were manufactured during some period. Ld. Counsel also pointed out that, while directing them to reverse the entire credit taken on Molasses during the periods of dispute, the Department did not take in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... exempted products. Ld. Commissioner appears to have held correctly to this effect through a reasoning which is supported by decisions of the Supreme Court and the Tribunal holding that there is no one-to-one correlation of input and final product in the Modvat/Cenvat Credit scheme. We, therefore, are in complete agreement with the decision of the lower appellate authority. In the result, these ap ..... X X X X Extracts X X X X X X X X Extracts X X X X
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