Page 37 - ELT_1st September 2020_Vol 373_Part 5

Cenvat credit — Payment @ 8%/10% whether required in
respect of Phosphoryl A and Phosphoryl B, exempted
waste and by-product arising in course of manufac-
ture of dutiable Gelatin?
The Madras High Court Bench comprising Hon’ble Mr. Justice
Dr. Vineet Kothari and Hon’ble Mr. Justice R. Suresh Kumar on 7-1-2020 case
adjourned in the C.M.A. Nos. 1765-1769 of 2010 filed by Commissioner of Cen-
tral Excise, Salem against the CESTAT Final Order Nos. 1189-1193/2009, dated 7-
9-2009 (Sterling Biotech Ltd. v. Commissioner). While adjourning the case, the High
Court passed the following order :
“Heard Mr. V. Sundareswaran, Learned Counsel for the appellant and
Mr. S. Jaikumar, Learned Counsel for the first respondent.
2. The Learned Counsel for the Assessee may prepare a brief synop-
sis and Fact Sheet for manufacture of Gelatin and Phosphoryl A and Phos-
phoryl B, out of Hydro Chloric Acid (HCL), which is the input in the manu-
facture of these two final products. The question involved before the Court
is whether in view of Rule 6 of the New Cenvat Rules, 2004, the Assessee is
entitled to avail the Cenvat Credit even though it is manufacturing the ex-
empted goods in the form of Phosphoryl A and B, besides manufacturing
Gelatin, which is a dutiable product out of common input HCL.
1 2. The Learned Counsel for the Revenue Mr. Sundareswaran has
argued that Rule 6 is a departure from the earlier Modvat Scheme con-
tained in Rule 57CC and Rule 57D and the new Cenvat Rule 6(1) denies the
Cenvat credit, if the input is used for manufacture of exempted goods, and
therefore, the Tribunal, by the impugned order has erred in allowing the
Cenvat credit in the present case to the Assessee, to the extent of manufac-
ture of Phosphoryl A and B (exempted goods) by the Assessee.
3. On the other hand, the Learned Counsel for the Assessee Mr.
Jaikumar relying on the judgment of the Bombay High Court in the case of
Rallis India Ltd. v. Union of India, 2009 (233) E.L.T. 301 (Bom.), which is sister
concern of the Assessee, where, under the earlier Modvat Rules, the Bom-
bay High Court has allowed the Modvat Credit to the Assessee in similar
circumstances upon the manufacture of Gelatin and Phosphoryl A and B,
out of same input in the form of Hydro Chloric Acid.
4. Both the Learned Counsel may file their respective short note be-
fore the next date of hearing.
5. Post on 4 February 2020.”
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1 Paragraph number as per official text.
( A139 )
EXCISE LAW TIMES  1st September 2020  37