Custom, Excise & Service Tax Tribunal
M/S.Rohit Surfactants (P) Ltd vs Cce, Jaipur-I on 15 February, 2011
CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL,
WEST BLOCK NO.II, R.K. PURAM, NEW DELHI-110066.
SINGLE MEMBER BENCH
Central Excise Appeals No.2484 OF 2007-SM
(Arising out of Order-in-Appeal No.251 (GRM) CE/JPR-I/2007 dated 08.8.2007 by the CCE (A), Jaipur)
For approval and signature:
Honble Mr. Rakesh Kumar, Member (Technical)
1
Whether Press Reporters may be allowed to see the Order for publication as per Rule 27 of the CESTAT (Procedure) Rules, 1982?
2
Whether it should be released under Rule 27 of the CESTAT (Procedure) Rules, 1982 for publication in any authoritative report or not?
3
Whether Their Lordships wish to see the fair copy of the Order?
4
Whether Order is to be circulated to the Departmental authorities?
M/s.Rohit Surfactants (P) Ltd. Appellants
Vs.
CCE, Jaipur-I Respondent
Present for the Appellant: Shri A.P.Mathur, Advocate
Present for the Respondent: Shri K.P.Singh, SDR
Coram: Honble Mr. Rakesh Kumar, Member (Technical)
Date of Hearing/Decision: 15.02.2011
ORAL ORDER NO._______________
PER: RAKESH KUMAR The facts of the leading to this appeal are, in brief, as under:
1.1. The Appellant are engaged in the manufacture of detergent powder and cakes chargeable to Central Excise duty and are availing the facility of Cenvat credit on inputs, capital goods and input services under Cenvat Credit Rules, 2004. While their main products are detergent powder and detergent cake one of the inevitable by-product is spent sulphuric acid, which is cleared at nil rate of duty under Notification No.04/2006-CE dated 1.3.2006 (S.No.32). The department was of the view that since the appellants are not maintaining separate accounts and inventory of the dutiable final product and exempted final product and credit of Central Excise duty on common inputs has been availed, Rule 6 (3) (b) of Cenvat Credit Rules, 2004 will be attracted and they will be required to pay an amount of 10% of the price of spent sulphuric acid. It is on this basis that the duty demand of Rs.1,46,435/- was confirmed against the appellant alongwith interest and penalty. However, on appeal to the Commissioner (Appeals), the Commissioner (Appeals) vide Order-in-Appeal dated 8.8.2007 upheld the order of the Assistant Commissioner and dismissed the appeal. It is against this order of the Commissioner (Appeals), the present appeal has been filed by the appellant.
2. Heard both sides.
3. Shri A.P.Mathur, Advocate, the learned Counsel representing the respondent, pleaded that the spent sulphuric acid is an inevitable by-product, that even if the units wants, it cannot maintain separate accounts, that in identical facts in the case of same appellant, this Tribunal vide Order No.457/2010-SM dated 13.4.2010 for earlier period has held that the provisions of Rule 6(3) (b) are not applicable, that Honble Allahabd High Court in the case of Varun Sulphonators Pvt.Ltd. vs. Union of India reported in 1993 (68) ELT 42 has held that when spent sulphuric acid is obtained as bye-product, the credit in respect of such spent sulphuric acid is not required to be reversed and that in view of this the impugned order is not correct.
4. Shri K.P.Singh, the learned DR, defending the impugned orders, reiterating the findings of the Commissioner (Appeals) cited the judgement of this Tribunal in the case of Binani Zinc Ltd. vs. CCE, Cochin reported in 2005 (187) ELT 390 and also the judgement of this Tribunal in the case of CCE, Indore vs.Vishwa Organics Pvt.Ltd reported in 2004 (176) ELT 273, pleaded that the Tribunals judgement in the case of Binani Zinc Ltd. (supra) is in respect of Rule 57CC which is identical to Rule 6 (2) read with Rule 6 (3) (b) of Cenvat Credit Rules, 2004 and in this case, the Tribunal has held that even if exempted goods emerge as by-product, the provisions of Rule 57CC would apply.
5. I have carefully considered the submissions from both the sides and perused the records. The issue involved in this case is squarely covered by the decision of the Tribunal in the case of Narmada Gelatine Ltd. vs. CCE, Bhopal reported in 2009 (233) ELT 332 and also the decision of Honble Bombay High Court in the case of CCE vs. Rallis India Ltd. reported in 2009 (233) ELT 301 (Bom.) wherein it has been held that provisions of Rule 6(3) (b) are not applicable in the case of arising inevitable waste or bye-product fully exempt from duty. In such cases, even if the manufacturer wants, he can not comply with the provisions of maintaining separate accounts and inventory of the inputs meant for dutiable main product and the inputs going into inevitable waste or bye-product. In view of this, the impugned order is not correct. The same is set aside and the appeal is allowed.
(pronounced in the open court) (RAKESH KUMAR) MEMEBR (TECHNICAL) mk 1 4