Nitta Gelatin India Ltd. Vs Commissioner of Central Excise (CESTAT Bangalore)
Summary: CESTAT Bangalore allowed three connected appeals filed by M/s. Nitta Gelatin India Ltd. against the common Order-in-Appeal dated 28.01.2016. The appellant manufactured Gelatin and availed CENVAT credit on inputs such as hydrochloric acid, furnace oil and acetic acid, as well as input services and capital goods. During manufacture of Gelatin, sludge arose as an inevitable waste product. The sludge was subsequently treated with acetic acid, washed with hot water and treated with caustic soda to produce fertilizer known as Nutri Gold, classifiable under CTH 3105 5900. Nutri Gold had earlier been exempt under Notification No. 4/2006 dated 01.03.2006. Thereafter, it was cleared at a concessional rate of duty subject to the condition that credit on inputs or input services used in manufacture of the product had not been taken.
Revenue alleged that because the appellant had availed CENVAT credit, the concessional notification was unavailable and differential Central Excise duty and equal penalties were consequently payable. The appellant contended that Gelatin was its only final product and sludge emerged as hazardous waste during its manufacture; no CENVAT credit had been availed on inputs or input services used for manufacture of Nutri Gold itself. It further argued that Rule 6 of the Cenvat Credit Rules, 2004 did not apply to waste generated during manufacture of Gelatin. The Tribunal examined the show-cause notice and the original authority’s findings and observed that the notice did not identify any inputs exclusively used in manufacturing Nutri Gold. Even the adjudication order did not categorically specify such inputs, but merely stated that some portion of inputs was used for manufacture of fertilizer.
