JUDGMENT 1. - The petitioner - Revenue has filed these two revision petitions being aggrieved by order dated 13.03.2009 of the Rajasthan Tax Board, Ajmer dismissing Revenue's appeals against the order of Deputy Commissioner (Appeals) dated 05.11.2007 and holding that for the period of assessment 2006-07 (01.04.2006 to 30.06.2006), the assessee was entitled to full Input Tax Credit under Section 18 of the Rajasthan VAT Act, 2003 enforced w.e.f. 01.04.2006 (for short, hereinafter referred to as 'VAT Act 2003'); and such input tax credit was not liable to be reduced proportionately by 25% to the extent of manufacture of tax exempted "Chaff' ("Chokar") in the process of manufacture of "Aata", "Maida" and "Suji", which are taxable wheat products and for manufacture of which the wheat (raw material) was purchased by the respondent-assessee upon payment of Sales Tax/VAT and full input tax credit in respect of which was claimed under Section 18 of the Act against the tax payable by the assessee on the sale of "Aata", "Maida" and "Suji" during the period in question. 2. The Assessing Authority vide the assessment order dated 30.08.2007 disallowed the input tax credit to the extent of sale of exempted goods, namely, wheat bran (Chaff/Chokar) by the assessee, which was assessed by him @ 25% of total input tax credit, which was not in the list of exempted goods in Schedule-I to the VAT Act, 2003 during the relevant period and imposed reverse tax, as provided in the said Act holding that since only the finished goods "Aata", "Maida" and "Suji" were taxable whereas wheat bran (Chaff/Chokar) was not taxable or was exempted from payment of tax, therefore, the Input Tax Credit was not allowable to the assessee to the extent of 25% of its claim assuming that production of wheat bran (Chaff/Chokar) was to the extent of 25% of the total production, out of such wheat used as raw material by the assessee-respondent. 3. 3. The first appeal filed by the assessee was, however, allowed by the learned Deputy Commissioner (Appeals) vide order dated 05.11.2007 relying upon the decision of Hon'ble Supreme Court in the case of Commissioner of Sales Tax, Bombay v. Bharat Petroleum Corporation Ltd., reported in (1992) 85 STC 220 (SC) : (1992) 2 SCC 579 and Punjab & Haryana High Court D.B. decision in the case of Sharda Cotton Ginning & Pressing Factory v. State of Haryana & Ors., reported in (2001) 123 STC 449 (P&H) . 4. Revenue's appeals before the learned Tax Board, Ajmer also failed and by the impugned order dated 13.03.2009, the learned Tax Board held that the assessee was entitled to full input tax credit and the same could not be proportionately reduced merely because the wheat bran (Chaff/Chokar) was produced as a byproduct in the process of manufacture by using the wheat as raw material for manufacture of taxable goods, namely, "Aata", "Maida" and "Suji". The learned Tax Board also relied upon aforesaid two decisions of the Hon'ble Supreme Court in the case of Bharat Petroleum Corporation Ltd. (supra) and Punjab & Haryana High Court in the case of Sharda Cotton Ginning & Pressing Factory (supra). Thus, being aggrieved of the same, the Revenue has filed present revision petitions before this Court. 5. Mr. G.R. Punia, learned AAG & Senior Advocate assisted by Mr. Mahendra Choudhary, submitted that in view of clear and unambiguous provisions of Section 18 of the VAT Act of 2003, the assessee was not entitled to input tax credit to the extent of manufacture of VAT exempted goods, namely, wheat bran (Chaff/Chokar); and the Assessing Authority was justified in proportionately reducing the input tax credit to the extent of 25% of the total input tax credit claimed by the assessee for the period In question. He drew the attention of the Court towards the words "to the extent of in Section 18 (1) of the Act and then last para of said Section, namely, "if the goods purchased are used partly for the purposes specified in this sub-section and partly as otherwise, input tax credit shall be allowed proportionate to the extent they are used for the purposes specified in this sub-section." He, therefore, submitted that since there is no distinction between manufacture of main products like "Aata", "Maida" and "Suji" on the hand and byproduct, namely, wheat bran (Chaff/Chokar) on the other hand, therefore, no distinction can be made between two and even if manufacture of wheat bran is taken to be a byproduct, the sale thereof, admittedly made by respondent-assessee as VAT exempted goods, as the same was specifically included in Schedule-I, to the Act and Entry No.3 of the said Schedule, therefore, the proportionate input tax credit was rightly disallowed by the learned Assessing Authority and Tax Board has erred in holding otherwise. 6. Explaining these two judgments, cited above and relied upon by the assessee before the appellate forums below, Mr. G.R. Punia, Sr. Advocate, submitted that in the cases before the Hon'ble Supreme Court and Punjab & Haryana High Court, the statutory provisions were not available in this regard for giving only proportionate set-off or input tax credit and, therefore, the Hon'ble Courts noticing this fact, namely, absence of specific statutory provisions, allowed full benefit of set-off to the assessee and, therefore, not only these two judgments are distinguishable from the fact situated in the present on the basis of statutory position available before this rurt in the present matter, but on the other hand, these judgments would support the case of the Revenue as a necessary corollary. 7. E-Converso, Mr. Sanjeev Johari, learned counsel appearing for the respondent-assessee vehemently urged that intention of the assessee was not to manufacture wheat bran, the exempted goods, but the wheat was used as raw material, mainly and solely, for purposes of manufacture of taxable goods, namely, "Aata", "Maida" and "Suji"; and on the VAT payable upon the sale on such taxable goods, the entire and full input tax credit, representing the VAT paid by the assessee on the purchase of wheat, deserved to be allowed to the assessee and the same could not be proportionately reduced by 25%. The byproduct, which simply came out in the manufacturing process or obtained during such process and sold by the assessee having some commercial value, even though exempted from payment of tax as per Schedule-I (Entry No.3), the intention of legislature in allowing the full input tax credit, cannot be said to be defeated and same was allowable to the assessee in the present case. He also urged that unless the raw material is intended to be used in manufacture of tax exempted goods as such, the full input tax credit cannot be denied to the assessee and no bifurcation or proportionate reduction can be made in this regard. He again relied upon the aforesaid two judgments in favour of respondent-assessee in support of his contention as aforesaid. He also urged that even if two views are possible, while interpreting these provisions of Section 18 of the Act, a view favouring the assessee should be taken in this regard as per well the settled rule of interpretation of taxing statutes and in any case no penalty could be imposed by the Assessing Authority while imposing reverse tax, denying the proportionate input tax credit relief to the assessee in the present case and to the extent of deletion of penalty, the order of Tax Board deserves to be upheld. 8. I have given my thoughtful consideration to the rival submissions, relevant provisions and judgments cited at bar. 9. The provision of Section 18 of the VAT Act of 2003 are reproduced below for ready reference. "18. 8. I have given my thoughtful consideration to the rival submissions, relevant provisions and judgments cited at bar. 9. The provision of Section 18 of the VAT Act of 2003 are reproduced below for ready reference. "18. Input Tax Credit:- (1) Input tax credit shall be allowed, to registered dealers, other than the dealers covered by sub-section (2) of Section 3 or section 5, in respect of purchase of any taxable goods made within the State from a registered dealer to the extent and in such manner as may be prescribed, for the purpose of (a) sale within the State of Rajasthan; or (b) sale in the course of Inter-state trade of commerce; or (c) sale in the course of export outside the territory of India; or (d) being used as packing material of goods, other than exempted goods for sale; or (e) being used as raw material except those as may be notified by the State Government in the manufacture of goods other than exempted goods, for sale within the State of in the course of Inter-state trade or commerce; or (f) being used as packing material of goods or as raw material in manufacture of goods for sale in the course of export outside the territory of India; or (g) being used in the State as capital goods in manufacture of goods other than exempted goods; however, if the goods purchased are used partly for the purpose specified in this sub-section and partly as otherwise, input tax credit shall be allowed proportionate to the extent they are used for the purposes specified in this sub-section." 10. Entry No. 3 of Schedule-I, containing list of exempted goods under the VAT Act, 2003, before and after its amendment on 11.04.2006 and 02.04.2008 are also reproduced below for ready reference : "3. Aquatic feed, poultry feed and cattle feed, including grass, hay and star, gwar churi, gwar korma, 1 [Supplement and husk of cereals and pulses, concentrates and additives.] 1. Substituted vide Notification No. F.12 (15) FD/Tax/08-02 dated 2.4.2008 for the words - "supplement and husk of cereals and pulses. *[bran of wheat] concentrates and additives and de-oiled cake". "Inserted vide Notification No. F.12 (63) FD/Tax/2005-3 dated 11.4.2006 w.e.f. 1.4.2006." 11. Substituted vide Notification No. F.12 (15) FD/Tax/08-02 dated 2.4.2008 for the words - "supplement and husk of cereals and pulses. *[bran of wheat] concentrates and additives and de-oiled cake". "Inserted vide Notification No. F.12 (63) FD/Tax/2005-3 dated 11.4.2006 w.e.f. 1.4.2006." 11. Admittedly, for the period in question before this Court in the present case, namely, 01.04.2006 to 30.06.2006 is prior to the amendment w.e.f. 02.04.2008 and, therefore, bran of wheat or Chaff/Chokar was exempted goods under Schedule-I of the VAT Act and there is no dispute on this from the side of the assessee. 12. Now as far as the Hon'ble Supreme Court decision in the case of Bharat Petroleum Corporation Ltd. (supra) is concerned, reproduction of relevant portion of the said judgment is considered appropriate here : "Turning now to the main question, we are inclined to agree with respondents' counsel that they are entitled to a set-off of the entire tax paid by them on the purchases of sulphuric acid and cotton, respectively. The only condition under the rule is that the goods purchased on payment of tax should have been used in the manufacture of taxable goods for sale. Their concurrent user for the manufacture of another item of goods which may or may not be taxable is immaterial though we may point out that in the Bharat Petroleum case, the kerosene was also taxable for nine months in the year and in the case of Phulgaon Cotton Mills, yarn was also manufactured and it was subject to tax. Sri Dholkia contends for an implicit principle of apportionment on the basis of turnovers of various items of goods manufactured and restriction of the quantum of set-off to a proportion based on the turnover of taxable goods to the total turnover. He cited certain decisions under the Income-tax and Sales Tax Acts in support of this contention : Anglo-French Textile Company Ltd. v. Commissioner of Income-tax, (1954) 25 ITR 27 (SC) , Tata Iron & Steel Co. Ltd. v. State of Bihar, AIR 1963 SC 577 : (1963) 48 ITR (SC) and Commissioner of Income-tax v. Best & Co. (Private) Ltd., (1966) 60 ITR 11 (SC) . We do not think these cases are of assistance. Ltd. v. State of Bihar, AIR 1963 SC 577 : (1963) 48 ITR (SC) and Commissioner of Income-tax v. Best & Co. (Private) Ltd., (1966) 60 ITR 11 (SC) . We do not think these cases are of assistance. The first two cases dealt with the question as to when profits and gains can be said to accrue or arise in a manufacturing business and the third held that when a receipt is a composite one of capital and revenue nature, it is open to the Revenue to apportion the same and bring the latter to tax. These are situations in which the taxable element Is severable. Under the rules presently under consideration also, situations are conceivable where such severance is implicit. For instance, suppose the cotton purchased is utilised partly for manufacture of cloth that is taxable and partly for manufacture of cloth that is not taxable or partly for the manufacture of yard which is taxable and is sold and partly for manufacture of cloth which is not taxable. In these instances, it is clear that only some of the cotton is utilised for the first purpose and some for the second purpose and so only the purchase tax paid in respect of the quantity utilised for the first purpose will be eligible for set-off. But the type of user with which we are concerned is a composite one in which it is not possible to correlate any part of the purchased goods as having gone in for the purpose of manufacture of taxable goods. The position is picturesquely brought out in the case of Bharat Petroleum. The entire sulphuric acid purchased has no doubt been used in the manufacture of kerosene though perhaps not a drop of acid clings to the kerosene manufactured. Equally, the entire sulphuric acid has gone into the composite of the acid sludge. The 3,048.760 M.T. of acid have dissolved the impurities in the crude oil and conglomerated with them to constitute 3541.485 M.T. of acid sludge. Having regard to the nature of the interactions here, it is controvertible that the entire sulphuric acid purchased has gone into the manufacture of the sludge. The rules do not require that the purchased goods must have been used only for the manufacture of taxable goods for sale. Having regard to the nature of the interactions here, it is controvertible that the entire sulphuric acid purchased has gone into the manufacture of the sludge. The rules do not require that the purchased goods must have been used only for the manufacture of taxable goods for sale. In this situation, it is not possible to cut down the quantum of relief clearly outlined in the rule on the basis of some general principle claimed to underlic the provision. As Sri Bodbe rightly pointed out, the basis for the relief provided is not every clear-cut. Various reliefs have been provided in a group of rules which come in for application in various situations. The relief may be based on the principle that the manufactured product is taxed either in the hands of the same assessee or in someone else's hands, or that the manufactured goods are exported which may yield no tax but earn foreign exchange, or even that the purchases are utilised for manufacture of goods in the State thus contributing to the industrial development of the State. It is, therefore, difficult to read into the provision a quantitative correlation of the goods resulting in a taxable turnover and the purchases of raw materials on which tax has been paid. In this background, the straight-forward answer to the question raised lies in the literal interpretation of the language of the rules without straining to discover some doubtful principle for denying relief. For the above reasons, we agree with the view taken by the High Court and followed by the Tribunal and dismiss these appeals. We, however, make no order regarding costs." 13. By a close scrutiny of aforesaid extract, it is clear that the Hon'ble Supreme Court while holding in favour of assessee that he was entitled to full set-off of tax paid on acid (raw material) against the manufacture of kerosene (taxable product) and such set-off benefit could not be curtailed even if the 'acid sludge' obtained as byproduct in the process of manufacture of kerosene came out and was sold as a tax-free product, the Hon'ble Apex Court noted that contention of the State raised by Mr. Dholkia, Senior Advocate for implicit principle of apportionment on the basis of turnovers of various items of goods manufactured and restriction of quantum of set-off to a proportionate basis of turnover of taxable goods to the total turnover, should be applied was liable to be negatived. More particularly, In view of the fact that "the rules do not require that purchased goods must have been used only for manufacture of taxable goods." These words, as a matter of crux, renders the present assessee before this Court without any help from the aforesaid decision of the Apex Court in the present matter because Section 18 in the present case specifically and unequivocally lays down that if the goods purchased are used partly for the purposes specified in this sub-section. The purpose specified in Section 18 (1) (e) of the Act is that goods purchased are being used as raw material in the manufacture of goods other than exempted goods, for sale within the State or in the course of Inter-State trade or commerce. 14. Admittedly, while the wheat bran, the exempted goods, were sold as exempted goods and were obtained in the process of manufacture of taxable goods viz. "Aata", "Maida" and "Suji" as merely byproduct Section 18 of the Act of 2003 does not make any distinction between such byproduct or final product, which are taxable goods for the manufacture of which the raw material, namely, wheat was used. Therefore, in the face of specific provision, the ratio of Supreme Court decision in the case of Bharat Petroleum Corporation Ltd. (supra), would support the contention of the petitioner-Revenue rather than the assessee. 15. Therefore, in the face of specific provision, the ratio of Supreme Court decision in the case of Bharat Petroleum Corporation Ltd. (supra), would support the contention of the petitioner-Revenue rather than the assessee. 15. As far as Punjab & Haryana High Court decision in the case of Sharda Cotton Ginning & Pressing Factory (supra) is connected, the Division Bench of Punjab & Haryana High Court relying upon the Supreme Court decision in the case of Bharat Petroleum Corporation Ltd. (supra) also noticed that same Tribunal in its earlier view in the case of Jyoti Luxman Roller Flour Mills P. Ltd., Rohtak v. State of Haryana , in which facts were almost similar to the facts of the present case, as the assessee there was also engaged in manufacturing of "Aata", "Maida" and "Suji" by holding that assessee was entitled to full rebate or set-off of tax paid by him on wheat, even though wheat bran was a tax-free item yet since the Tribunal took the subsequent view against the assessee, specially the same Presiding Officer of the Tribunal, the Division Bench of Punjab & Haryana High Court set aside the subsequent order of Tribunal and remanded the case back to the Tribunal for decision afresh in accordance with law. 16. It would be of some relevance to reproduce the relevant paras 8, 9 and 10 of the judgment of Punjab & Haryana High Court in the case of Sharda Cotton Ginning & Pressing Factory (supra) : 8. For the purpose of deciding the aforementioned question, it will be useful to refer to the order, annexure p5, passed by Tribunal in the case of Jyoti Luxman Roller Flour Mills (S.T.M. Nos. 10-11 of 1999-2000 decided on June 22, 2000). The facts of that case were that the assessee was manufacturing atta, maida, suji and wheat by using tax paid wheat. It claimed rebate/refund of tax in lieu of the wheat used in the manufacture of the final product. The Assessing Authority rejected its claim for full rebate on the ground that wheat bran was a tax-free item. The Joint Excise and Taxation Commissioner (Appeals) and the Tribunal upheld the order of the Assessing Authority. It claimed rebate/refund of tax in lieu of the wheat used in the manufacture of the final product. The Assessing Authority rejected its claim for full rebate on the ground that wheat bran was a tax-free item. The Joint Excise and Taxation Commissioner (Appeals) and the Tribunal upheld the order of the Assessing Authority. However, while deciding the review petition and reference application filed by the assessee by a common order (annexure P5), the Tribunal changed its earlier view and remanded the case to the Assessing Authority by relying upon the decision of the Supreme Court in the case of Bharat Petroleum Corporation Ltd., (1992) 85 STC 220 . The relevant extract of that order are reproduced below : "The honourable Supreme Court has held that if a relevant and material provision of law was not brought to the notice of the court, the court would be justified to review its order. The counsel for the petitioner, for the question under the State Act, has relied upon the judgment of the honourable Supreme Court reported in (1992) 85 STC 220 , Commissioner of Sales Tax, Bombay v. Bharat Petroleum Corporation Ltd. at page 231 which reads as under: "Turning now to the main question, we are inclined to agree with respondents' counsel that they are entitled to a set-off the entire tax paid by them on the purchases of sulphuric acid and cotton, respectively. The only condition under the rule is that the goods purchased on payment of tax should have been used in the manufacture of taxable goods for sale. Their concurrent user for the manufacture of another item of goods which may or may not be taxable is immaterial...... Obviously, the aforesaid judgment of the honourable Supreme Court which was otherwise relied upon by the Tribunal in the impugned order fully supports the case of the petitioner. I therefore, taking matter suo motu under section 41 (3) hold that this case needs re-examination regarding rebate/refund of tax paid on wheat even if concurrently wheat was used in the manufacture of wheat bran which is tax-free commodity. ......... In view of these detailed observations, I do not find it tenable and proper to refer the aforesaid two questions to the High Court. ......... In view of these detailed observations, I do not find it tenable and proper to refer the aforesaid two questions to the High Court. Instead, I decide these two questions under section 41 (3) of the Haryana General Sales Tax Act, 1973 as these are covered by the judgments of the High Court/honourable Supreme Court and remand this case to the Assessing Authority for fresh decision in view of (1992) 85 STC 220 , Commissioner of Sales Tax, Bombay v. Bharat Petroleum Corporation Ltd. and in view of the Hindi notification referred to above....." 9. However, in the petitioner's case, the same presiding officer of the Tribunal rejected the claim of total rebate by making the following observations : "I have considered the matter carefully and have also seen the facts on record, judgments relied upon by both the parties and the authorities below. The Supreme Court judgment reported in Commissioner of Sales Tax, Bombay v. Bharat Petroleum Corporation Ltd., (1992) 85 STC 220 makes it abundantly clear that products include by-products as well. Meaning there is no distinction between the two for the purpose of taxation. For this reason, reliance by the counsel upon (1994) 94 STC 98 (P&H), Jagraon Co-operative Sugar Mills Ltd. v. State of Punjab cannot be any use of the appellants. In support of contention for total rebate under rule 24-A the counsels have referred to (1992) 85 STC 220 , Commissioner of Sales Tax, Bombay v. Bharat Petroleum Corporation Ltd. . A careful perusal of the judgment clearly reveals that Haryana provisions which were inserted in the form of rule 24-A and 24-B came much after the aforesaid judgment was delivered by the apex Court. Besides, the counsel could not establish similarity between the provisions interpreted by the honourable apex Court and those contained in Haryana General Sales Tax Rules (rule 24-A and 24-B) as stressed by the departmental representative and are absolutely clear. These will lead to conclude that if tax paid goods go into manufacture of taxable goods, relief into toto will be admissible. Such relief will not be admissible, if tax-free goods are also produced as a result of the process of manufacture. And in the event of the process resulting into production of taxable and tax-free goods, grant of proportionate relief shall be the most logical conclusion. Such relief will not be admissible, if tax-free goods are also produced as a result of the process of manufacture. And in the event of the process resulting into production of taxable and tax-free goods, grant of proportionate relief shall be the most logical conclusion. (This observation of Division Bench of Punjab & Haryana High Court clearly helps the Revenue before this Court in present matter.) That being the legal position under the Haryana provisions, the orders of the authorities below applying pro rata basis are fully in accordance with the provisions of law. The counsels, for dealers have also assailed the use of department instructions by the authorities. According to them such instructions can be made use of prospectively, nor retrospectively. But this contention cannot hold ground in view of clear law laid down by the Supreme Court of India in the case reported as Manickam and Co. v. State of Tamil Nadu, (1977) 39 STC 12 . The instructions of the department, are in the nature of an exposition or explanation. Such an exposition in the light of the judgment referred to by the departmental representative could be validly made use. This view has already been taken by the collateral Tribunal in S.T.A. Nos. 600-601 of 1998-99 decided on May 28, 1999 and a number of other cases. The judgments relied upon by the counsels are not strictly applicable to the facts of the present cases. In view of these clear facts on record and the judgments referred to above the orders of the lower authorities do not call for any interference and are accordingly upheld. The appeals are therefore, dismissed. 10. In our opinion, the orders passed by the Tribunal in the case of Jyoti Luxman Roller Flour Mills (S.T.M. Nos. 10-11 of 1999-2000 decided on June 22, 2000) and the petitioner are ex facie contradictory and the only proper course to remove the resultant discrimination qua the petitioner is to quash the impugned order with a direction to the Tribunal to decide the petitioner's appeal afresh. 17. 10-11 of 1999-2000 decided on June 22, 2000) and the petitioner are ex facie contradictory and the only proper course to remove the resultant discrimination qua the petitioner is to quash the impugned order with a direction to the Tribunal to decide the petitioner's appeal afresh. 17. The Hon'ble Supreme Court upholding the said remand order of Punjab &-Haryana High Court in State of Haryana v. Satish Oil & General Mills, reported in (2005) 10 SCC 271 , held in Para 4 as under : "In our view, the High Court was right in setting aside the decision of the Tribunal both on the ground that the Tribunal should have followed its earlier decision and on the question of interpretation of the decision in Bharat Petroleum case. The appellant had conceded before the High Court that the earlier decision of the Tribunal in Jyoti Laxman Roller Flour Mills case (supra) covered the facts in the respondent's case. Therefore, if the Tribunal was of the view that the earlier decision was wrong it should have referred the matter to a larger Bench. The High Court has not, as appears to be the apprehension of the appellant, decided the question of applicability of the decision in Bharat Petroleum to the respondent's case either as a matter of fact or as a matter of law. It is for that purpose that the remand was made. We, therefore, see no reason to interfere with the decision of the High Court. The same is affirmed and the appeals are dismissed but without any order as to costs." 18. That a byproduct or a waste product can also be a marketable commodity and such regularly marketed product can also attract excise duty, was held by Supreme in CT Cotton Yarn Ltd. v. Commissioner of Central Excise, Indore, reported in (2006) 7 SCC 794 . However, the Apex Court remanded the case back to Tribunal in the following terms : "8. It is clear that the product involved herein is not a leftover after the end product is manufactured. Here the cotton waste is generated during the process of manufacture of yarn. In other words, when cotton purchased in the domestic market is used for manufacture of yarn, by initiating the process of manufacture, at an intermediate stage, the so-called cotton waste is produced, which is a marketable commodity and which is regularly marketed. Here the cotton waste is generated during the process of manufacture of yarn. In other words, when cotton purchased in the domestic market is used for manufacture of yarn, by initiating the process of manufacture, at an intermediate stage, the so-called cotton waste is produced, which is a marketable commodity and which is regularly marketed. Therefore, one of the twin tests, namely, that the commodity which is produced is marketable and is regularly marketed as a product, is satisfied. It is by now established that merely because a commodity is included in the Schedule, it will not be exigible to duty unless a process of manufacture is involved when that product emerges. Here, Heading 52.02 has been brought in the Schedule by the Finance Act, 1995. Though it is shown as an item bearing nil duty, since the appellant is a 100 per cent export-oriented manufacturing entity it will be liable to duty as provided in the proviso to Section 3 (1) of the Tariff Act. Therefore, the question involved is whether a process of manufacture is involved when the cotton waste is generated during the process of converting domestically purchased cotton into exportable yarn manufactured by the appellant. 9. In CST v. Bharat Petroleum Corpn. Ltd. this Court held that where a subsidiary product is turned out regularly and continuously in the course of manufacturing business and is also sold regularly from time to time, there may be attributed an intention to the manufacturer to manufacture and sell not merely the main item but also the subsidiary products. This Court relied on an earlier decision in State of Gujarat v. Raipur Mfg. Co. Ltd. in support of the position that manufacture was involved in that situation. Cotton waste generated was hence held to be by a process of manufacture. For the appellant it is submitted that the manufacture of a product may involve several processes and various changes on the raw material at different stages. Manufacture would occur at the point where the changes take the product to a point that commercially, it cannot be regarded as the original commodity, but, instead, recognised as a new distinct article. The decision of this Court in J.G. Glass Industries is relied on in support. 10. The scope of the expanded definition of manufacture has been considered In the decision in Shyam Oil Cake Ltd. v. CCE . The decision of this Court in J.G. Glass Industries is relied on in support. 10. The scope of the expanded definition of manufacture has been considered In the decision in Shyam Oil Cake Ltd. v. CCE . The Appellate Authority has essentially proceeded on the amendment to the Schedule and inclusion of cotton waste therein and the admission of the representative of the appellant that subsequent to the inclusion in the Schedule, cotton waste is taxable. It appears to us that the question whether cotton waste is dutiable as a manufactured product requires to be reconsidered by the Tribunal in the light of the various decisions of this Court brought to our notice and which may hereafter be brought to the notice of the Tribunal. The argument that it was only after the process of manufacture had started that the product has come into existence and it has marketability and hence, it is dutiable and the counter argument that it was only impure cotton which has got separated from the cotton purchased from the open market so as to enable the appellant to manufacture the yarn intended for export and this product produced at the intermediate stage still remains cotton and it is not a manufactured product, have both to be considered in the light of the decided cases. In this situation, we think it appropriate to set aside the order of the Tribunal and remand the appeals filed by the appellant to the Tribunal for a fresh decision. We think that this aspect needs to be reconsidered by the Tribunal afresh and a fresh decision taken. We, therefore, set aside the order of the Tribunal on this aspect and direct the Tribunal to decide the appeals afresh based on the finding to be rendered on this question. All contentions including whether the Department could invoke the extended period of limitation are left open." 19. Thus, it is clear that view of Division Bench of Punjab & Haryana High Court supports the Revenue's case before this Court and Hon'ble Division Bench of Punjab & Haryana High Court remanded the case to Tribunal setting aside the contradictory later view of the Tribunal and the matter was remanded back to the learned Tribunal and such remand order of High Court come to be affirmed by Hon'ble Supreme Court in Satish Oil and General Mills case (supra). 20. 20. In the considered opinion of this Court, therefore, in view of specific provisions contained in Section 18 of the VAT Act of 2003, the ratio of the judgments relied upon by the learned counsel for the respondent-assessee would in fact support the case of the Revenue, and as a necessary corollary, it deserves to be held following these aforesaid judgments, that input tax credit in the present case, was rightly reduced and was allowed only proportionately to the extent of manufacturing and sale of taxable goods by the assessee in the present case, namely, "Aata", "Maida" and "Suji", manufactured out of raw material (wheat) and such input tax credit could not be allowed to the extent of sale of VAT exempted goods, namely, wheat bran (Chaff/Chokar), which has been assessed by the Assessing Authority to the extent of 25% of the input tax credit and reverse tax has been imposed on the respondent-assessee. 21. Therefore, as far as impugned order of learned Tax Board dated 13.03.2009 to the extent of setting aside the imposition of reverse tax disallowing the proportionate input tax credit is concerned, the same cannot be sustained and deserves to be quashed by this Court, and to that extent the revision petitions filed by the petitioner-Revenue deserve to be allowed. 22. However, as far as question or penalty u/s 61 of the Act is concerned, the Imposition of the same by the Assessing Authority under Section 61 of the Act of 2003 to the extent of double the amount of tax is concerned, the same cannot be sustained and deletion of penalty in these circumstances, where a debatable question was agitated by the respondent-assessee before the appellate forums created under the Act, it cannot be said that the assessee deliberately filed wrong returns or particulars of taxable turnover or malafide claimed 100% input tax credit. A benefit of doubt in this regard certainly goes in favour of respondent-assessee. 23. In these circumstances, and therefore, is found to be fit case for deletion of penalty on the respondent-assessee and the deletion of said penalty by two appellate forums below of Dy. Commissioner (Appeals) and Tax Board, is liable to be held justified. 24. Consequently, these revision petitions of the Revenue are partly allowed to the extent as indicated above. No order as to costs.Revision Allowed in Part as Above. *******