2013 (1) TMI 525 - ALLAHABAD HIGH COURT

Cenvat Credit - the waste bagasse emerged - Applicability of Rule 6 for production of exempted and non-dutiable goods - held that:- In the instant case 'sugar' is the final product and molasses is an intermediary product or by-product, therefore, for applicability of Rule 6, the manufacture of dutiable goods and manufacture of exempted goods are conditions precedent. Since waste is never manufactured and it only emerges in the process of manufacture of final product, Rule is not applicable to bagasse which is admittedly a waste, which emerges from the crushing of sugarcane for the manufacture of final product, namely, sugar.

The Apex Court while dismissing the Civil Appeal preferred by the department in the case of CCE v. Shakumbhari Sugar & Allied Industries Ltd. [2005 (8) TMI 615 - SUPREME COURT OF INDIA], uphold the findings recorded by the Tribunal in the case of Shakumbhari Sugar & Allied Industries Ltd., (supra) whereby it has been held that the 'Bagasse' obtained during the course of manufacture of sugar out of sugarcane may find an entry in Schedule to the Central Excise Tariff, but it does not become a final product merely on such entry.

As some of the petitioners deposited the entire duty and interest under protest, it should be returned to them, within a maximum period of four weeks, from the date of presentation of a certified copy of this order. - Decided in favor of assessee.