Custom, Excise & Service Tax Tribunal
Gupta Pigments And Chemicals Ltd vs Ghaziabad on 19 June, 2018
1
Appeal No. E/51375/2014-EX(DB)
CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL,
REGIONAL BENCH : ALLAHABAD
Division Bench
Appeal No. E/51375/2014-EX(DB)
[Arising out of Order-in-Appeal No. GZBEXCUS-000-APP-185-13-14
dated 28.11.2013 passed by Commissioner (Appeals) Central Excise
Ghaziabad]
Gupta Pigments And Chemicals Ltd. Appellant
Vs.
C.C.E. & S.T., Ghaziabad Respondent
Appearance:
Present for the Appellant: Shri Rajesh Chhibber, Advocate Present for the Respondent: Shri Pawan Kumar Singh (Superintendent) A.R. Coram: Hon'ble Shri Archana Wadhwa, Member (Judicial) Hon'ble Shri Anil G. Shakkarwar, Member (Technical) Date of Hearing/Decision: 19/06/2018 FINAL ORDER NO. 71294/2018 Per Ms. Archana Wadhwa:
After hearing both sides we find that the appellants are engaged in the manufacture of refined lead ingots and alloys out of imported raw material which is duty paid. They are availing Cenvat credit of duty paid on raw materials which are used in the manufacture of lead ingots.
2. During the process of manufacture of Lead ingots, lead dross emerges which according to the manufacture is neither the manufactured product nor the goods. The said Lead dross is further processed by the appellants' job workers and after the process of 2 Appeal No. E/51375/2014-EX(DB) silverization, silver bullion emerges. Such silver bullion is exempt from payment of duty.
3. Revenues case is that common inputs have been used in the manufacture of appellants final excisable product i.e. lead ingots, as also in the manufacture of exempted silver bullion, which emerges at the job workers factory out of lead dross, which comes in existence during the manufacture of lead ingots. As such, the appellant was required to pay 10% of the value of final exempted product. In view of the above, proceedings were initiated against them resulting in passing of the impugned order confirming demand of duty of Rs.18,81,320/- along with confirmation of interest and imposition of penalty of identical amount as also of Rs. One lakh.
4. After applying our mind to the issue involved, we find that the appellants are essentially and primarily engaged in the manufacture of lead ingots. During the course of manufacture of said final product, dross emerges as an inevitable evil. Such dross is sent by the appellant to their job workers for extraction of silver bullion. The emergence of dross is in the nature of waste material and such waste material further been utilized for extraction of silver bullion to a small extent.
5. The Hon'ble Bombay High Court decision in the case of Rallies India Ltd. vs. Union of India [2009 (233) ELT 301 (Bom.)] has held that provisions of Rule 6 are not applicable when the product emerges either as a waste or as a by-product. Inasmuch as the dross and silver bullion 3 Appeal No. E/51375/2014-EX(DB) emerges as by-product during the process of manufacture of final product, i.e. lead ingots, we are of the view that ratio of above decision of the Bombay High Court is fully applicable to the facts of the present case. Accordingly, we set aside the impugned order and allow the appeal with consequential relief, if any.
(Dictated and pronounced in the open Court)
(ANIL G. SHAKKARWAR) (ARCHANA WADHWA)
MEMBER (TECHNICAL) MEMBER (JUDICIAL)
(K. Gupta)