Order date – 18 November 2022

 Facts –

• The appellant, M/s. APL Apollo Tubes Ltd. is engaged in the manufacturing of MS Black Pipes and Galvanised from Pipes/ Tubes and during its manufacturing process unusable waste/residue in the form of zinc dross, zinc dust and flux skimming are generated which cannot be avoided. The appellant used to sell the said waste/residue in open market.
• The said waste/residue is exempted goods and hence provisions of Rule 6(3) of Cenvat Credit Rules, 2004 are attracted. Accordingly, two show-cause notices were issued to the appellant.
• First one was dated 26.2.2018 for liability of Rs.24,79,772/- for the period 2015-16 and the second show cause notice was dated 5.4.2018 demanding Rs.28,20,639/- for the period 2016-17 along with interest and equal penalty.
• Aggrieved appellant had filed an appeal

Issue –

• Whether unusable waste/residue in the form of zinc dross, zinc dust and flux skimming generated during the manufacturing process are exempted and whether provisions of Rule 6(3) of Cenvat Credit Rules, 2004 are attracted?

Order –

• The Tribunal finds that the issue involved herein is no more res integra in view of the decision of the co-ordinate Bench (Chennai Bench) of the Tribunal in Appellant’s own case M/s. APL Apollo Tubes Ltd. (Unit-II) vs. Commr. GST & CE; in which the Tribunal while dealing with the amendment in Rule 6 ibid allowed the Appeal filed by the appellant and held that when the zinc scrap, a waste arising out of process of manufacture of finished goods, is not the goods manufactured by the appellant, the same cannot be considered as exempted goods manufactured by them.
• The Tribunal also finds that Both the authorities below while upholding the demand raised, have relied upon the amendment made in Rule 6 ibid with effect from 1.3.2015 and came to the conclusion that after the aforesaid amendment w.e.f. 1.3.2015 zinc dross/flux/skimmings cleared by the appellant are covered by the provisions of Rule 6 ibid.
• Further the same ruling was held in the case of appellant’s sister concerns that, the goods which are not consciously manufactured by the appellants and which emerged in the process of manufacture cannot be considered as goods manufactured by the appellants, and in the view of the series of decisions of different Benches of the Tribunal deciding the issue in favour of the assessee, even after considering the amendment made in Rule 6 ibid, the tribunal is inclined to set aside the impugned order and the same is accordingly set aside.
• Hence the appeal is allowed.