The respondent defended the more by companytending that the very purpose of the grant of exemption to sulphuric acid was to keep the input companyts at the lowest for the production of fertilizers during the relevant period.
We are also informed that the Department did number file any appeal challenging the decision of Sterlite supra and the same has been accepted by the Department.
Zinc Oxide is further oxidised to produce zinc.
Other companytentions regarding the vires of Rule 57 CC were also raised.
5322/2010 Rallis India is engaged in the manufacture of Gelatin for use in pharmaceutical industry for manufacture of capsules.
Gelatin is produced by reacting Hydrochloric Acid with bovine animal bones.
Some quantities of sulphuric acid are sold to fertilizer plants in terms of numberification No.
In that case Sterlite was also a manufacturer of companyper and a companypetitor for Birla Copper using the same process and the Tribunal held that excise duty was number payable under 57 CC on the sulphuric acid cleared to fertiliser plants in view of this companyrts decision in the case of Swadeshi Polytex Ltd. v. CCE reported as 1989 44 ELT 794.
Sulphuric acid is companyverted into sulphur and the respondent does number take any Cenvat Credit on the inputs used after the emergence of sulphur dioxide.
Here again, whether the mother liquor is a waste product or by product was number disputed by the Department before the Tribunal or before the Bombay High Court.
The said products are chargeable under Chapter Sub heading No.
It was their defence that any duty demand on the sulphuric acid will defeat the very purpose of grant of exemption and make the fertilizer companyt higher than the desirable level.
In other case, same issue is decided by the CESTAT against which statutory appeal is preferred.
In fact, the government grants subsidies to the fertilizer plants for the difference between the companyt of production and sale price determined by the government.
6/2002 CE on the execution of bonds by the fertilizer plants to the satisfaction of the excise authorities.
In such a scenario, such higher companyt will have to be companypensated by the government as subsidy.
Fertilizers themselves were wholly exempted from the payment of excise duty because the government wanted the farmgate price to the farmer should be at the lowest.
Henceforth, in our discussion, reference would be to the Hindustan Zinc Ltd., as the respondent.
The High Court decided the petition in favour of the respondents on the interpretation of Rule 57CC and Rule 57D itself, without going into the question relating to the vires.
The said sulphuric acid is used for the production of zinc.
The sulphuric acid produced as a by product is sold on payment of excise duty to various industries.
The inorganic substances like phosphorous etc.
iii The excise department took a view that in terms of Rule 57 CC of the Rules, the respondents were obliged to maintain separate accounts and records for the inputs used in the production of zinc and sulphuric acid and in the absence of the same the respondents were obliged to pay 8 as an amount on the sale price of sulphuric acid to the fertilizer plants in terms of Rule 57 CC.
Department is in appeal before this Court against this judgment.
The respondent herein is a Public Limited Company and it was disinvested in April, 2002.
As an alternative, it was pleaded that even if Rule 57 CC is to be held as intra vires, the demand raised in the show cause numberices will number survive on proper interpretation of Rule 57CC of the Rules and hence is to be quashed.
When these by products and waste products are cleared without payment of duty, the Excise Department demanded duty 8 in terms of Rule 57 CC.
The aforesaid narration discloses the identity of the issue in the three set of appeals.
2807.00, 7901.10 and 2833.10 respectively of the First Schedule to the Central Excise Tariff Act, 1985 respectively among their other products.
A show cause numberice was issued on 15.3.2005 to the assessee respondent for recovery of Rs.
That is precisely the reason that all these appeals were bunched together and companylectively heard.
The respondent submitted in the said writ petition that Sulphur Dioxide Gas is produced during the manufacture of Zinc and lead and due to environmental companytrol requirements, they are prohibited from releasing the same in the air.
The respondent filed Writ Petition No.
66 issued under sub section 1 of Section 5A of the Central Excise Act the Central Government has exempted exciseable goods of the description specified in 3 of the table appended to the said Exemption Order.
The respondent is engaged in the manufacture of number ferrous metals like zinc, lead as well as Sulphuric Acid and Copper Sulphate.
The Tribunal also in the case of Sterlite supra held that 57 CC will apply only when same inputs are being used in manufacture of two or more final products, one of which is exempt from payment of excise duty and the assessee was number maintaining separate account and separate inventory.
In fact, the issue involved was decided by the High Court in a batch of Writ Petitions filed by M s. Hindustan Zinc vide judgment dated 23.1.2007 against which SLP under Article 136 of the Constitution was filed in which leave has been granted.
6776 of 2005 before the High Court, Jodhpur challenging the companystitutional validity of Rule 6 of the Cenvat Credit Rules, 2004 as well as the impugned show cause numberice dated 15.3.2005.
iv Respondent challenged the show cause numberices by filing writ petitions under Article 226 before the Rajasthan High Court, primarily challenging the vires of Rule 57 CC on the ground that the Central Government by subordinate legislation, can number fix rates of duties which is the prerogative of the Parliament under Section 3 of the Central Excise Act, 1944 read with Central Excise Tariff Act, 1975.
In so far as sulphuric acid which is used in the manufacture of fertilizers is companycerned, nil duty is provided.
The Tribunal decided the matter against the assessee by interpretating Rule 57 CC.
Therefore, Sulphur Dioxide is used for manufacture of Sulphuric Acid which is the input for manufacture of number ferrous metals like zinc and lead cannot be companysidered as companymon inputs for manufacture of Sulphuric Acid in as much as Sulphur is the only companyponent in companycentrate which goes into manufacture of Sulphuric Acid.
2337/2011 The manufacturing process of companyper from the companyper ore companycentrate is similar to that of zinc and the emergence of sulphuric acid as a by product was companyceded by the department before the Tribunal.
Sulphur obtained as a technological necessity is a pollutant and is, therefore, companyverted into sulphur dioxide in the presence of catalysts like Vanadium Pentaoxide Hydrogen Peroxide.
has held that Rule 57CC does number make any distinction between exempted final product and exempted bye product and hence, numberuseful purpose would be served by approaching the Tribunal.
ii When ZnS is heated calcined at high temperature in the presence of oxygen, zinc oxide ZnO and sulphuric acid are produced.
Birla Copper C.A. NO.
The Tribunal in this case decided the matter in favour of the respondent following its own judgment in the case of Sterlite Industries India Ltd. v. CCE reported as 2005 ELT 401.
Rallis India Ltd. C.A. No.
Significantly, the department has number disputed the emergence of sulphuric acid as a by product.
The same was challenged before the Bombay High Court, which has reversed the decision of the Tribunal.
During the reaction, the bone companyverts into ossein which in turn is used to produce gelatin.
The Department is in appeal against the decision of the High Court.
In this case, the Tribunal held that sulphuric acid was number a final product but only a by product and hence Rule 57 CC will number apply, particularly when we read the same in the light of Rule 57D. Departments appeal is against this order of the Tribunal.
In the present appeal, the companytention of the Department is that the Sterlite supra will apply for the period prior to 1.4.2000 when Rule 57 D was in force and post 1.4.2000, the Rule was deleted.
