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2012 (7) TMI 905 - AT - Central ExciseWaiver of pre-deposit, interest, penalty - The case of the Revenue is that bagasse and press mud are excisable goods, and the manufacturer of sugar and molasses are not maintaining separate records hence, as per the provisions of Rule 6 of the CENVAT Credit Rules, 2004, the manufacturer has to pay 5%-10% of the price of the exempted goods i.e. bagasse and press mud - Held that: - It may be noted that crushing of sugarcane is necessary to extract can sugar juice which in turn is processed for production of sugar and molasses - Thus, in our considered view, the amendment in Finance Act, cited by Shri Nagesh Pathak, AR and the Board Circular would not make any difference in the facts and, circumstances of the case. Moreover, neither the show-cause notice nor the impugned order in appeal mentions as to which common CENVAT credit availed inputs have been used in manufacture of sugar and molasses (dutiable final products) and bagasse (exempted final product). Since Bagasse emerges at sugarcane crushing stage, there is no possibility of any input-chemicals etc. having been used at that stage. The expression exempted goods has been defined for the purpose of CENVAT Credit Rules in Rule 2(d) to mean excisable goods which are exempt from the whole of duty of excise leviable thereon and includes goods which are chargeable to nil rate of duty. As per this definition, the impugned goods namely press mud and sludge would be covered under the definition exempted goods , though the same cannot be treated as excisable goods for the reasons stated in paragraph 5 above. The question raised in this case is whether in terms of Rule 6(3)(i), an amount equal to 10% / 5% would be payable on such goods. Considering the precedent decisions cited above, Board’s Manual provisions as well as Board’s circular cited above, I am of the view that the demand of 10% / 5% on press mud and sludge, which are in the nature of by-product and waste and also non-excisable cannot be sustained - Appeal allowed.
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