The Delhi bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT), while quashing a demand, has held that since Spent Acid is not an exempted good, therefore, the provisions of Rule 6(3) of CENVAT Credit Rules, 2004 are not applicable.
The appellant, M/s IPF Vikram Sulphonation Limited is a manufacturer of Sulphonic Acid and during the course of the manufacturing of Sulphonic Acid, Spent Acid emerges.
The appellant contended that as the Spent Acid is not an exempted good, therefore, the provisions of Rule 6(3) of CENVAT Credit Rules, 2004 are not applicable to the facts of the case as held by this Tribunal in the case of Dharamasi Morarji Chemicals Co. Ltd.
The department, on the other hand, held that the appellant shall pay an amount of equivalent 6% of the value of such Spent Acid in terms of Rule 6(3) of the CENVAT Credit Rules, 2004.
The order was challenged before the Tribunal.
Mr. Ashok Jindal, Member (Judicial) has observed that “the facts of the case are not in dispute that the appellant is a manufacturer of Sulphonic Acid and during the course of the manufacturing of Sulphonic Acid, Spent Acid emerges. As the Spent Acid is not an exempted good, therefore, the provisions of Rule 6(3) of CENVAT Credit Rules, 2004 are not applicable to the facts of the case as held by this Tribunal in the case of Dharamasi Morarji Chemicals Co. Ltd. (supra). Therefore, the demand against the appellant is not sustainable, accordingly, the same is not sustainable.”
Comments