2018 (1) TMI 490 – PUNJAB AND HARYANA HIGH COURT – 2018 (11) G. S. T. L. 302 (P & H) – CENVAT credit – manufacture of taxable as well as exempt goods – waste – chhilka, dundli, bhushi and sprout – Rule 6(3) of the Rules – Held that: – the Tribunal relying upon the decisions of the Bombay High Court in Hindalco Industries Limited vs. Union of India, [2014 (12) TMI 657 – BOMBAY HIGH COURT] held that for the by-products i.e. chhilka, dhundli, bhushi and sprout emerging during the manufacturing of malt and malt extract, the assessee is not liable to pay 10% of the value of the said goods – appeal dismissed – decided against Revenue. – CEA No. 35 of 2017 Dated:- 19-12-2017 – MR. AJAY KUMAR MITTAL, J. For The Appellant-Revenue : Mr. Saurabh Goel, Senior Standing Counsel Ajay Kumar Mittal, J. 1. This appeal has been preferred by the appellant-revenue under Section 35G of the Central Excise Act,1944 (in short, the Act ) against the impugned order dated 11.01.2017, Annexure A-4, passed by the
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dit on inputs, capital goods and input services. During the course of manufacturing of the said products, certain waste is generated that is called Chhilka, Dundli, Bhushi and Sprout which attract nil rate of duty. A.G.(Audit) Chandigarh while conducting audit of the party pointed out that during the manufacture of Malt & Malt Extract, other products like Chhilka, Bhusa and Sprouts falling under CETH 2301 attracting nil duty are also produced. They also pointed out that the party manufactured and cleared Malt, Malt Extract, Chhilka, Bhusa, Dundali and Sprouts using enzymes formaldehyde, manufact caustic soda, flakes etc. on which Cenvat Credit has been availed by it. The respondent assessee cleared Malt & Malt Extract on payment of applicable duty and Chhilka, Bhusa, Dundali and Sprouts at nil rate of duty. The assessee produced and cleared dutiable as well as exempted products using inputs on which Cenvat Credit has been availed without maintaining separate accounts for receip
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d an appeal before the Tribunal. Vide order dated 11.1.2017, Annexure A.4, the Tribunal allowed the appeal filed by the respondent assessee with consequential relief, if any. Hence the instant appeal by the appellant-revenue. 3. We have heard learned counsel for the appellant-revenue. 4. Admittedly, the respondent-assessee is engaged in the manufacturing of Malt and Malt extract. It is availing Cenvat Credit on inputs, capital goods and input services. During the course of manufacturing of said products, certain waste is generated that is called chhilka, dundli, bhushi and sprout which attract nil rate of duty. According to the appellant-revenue, as the assessee manufactures both dutiable as well as exempted final products, it is required to pay 10% of the value of exempted goods as per Rule 6(3) of the Rules. Accordingly, a show cause notice was issued to the assessee which was adjudicated by the appropriate authority and a demand of 10% of the value of the exempted goods was confirme
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