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2022 (7) TMI 1177 - HC - Central ExciseCENVAT Credit - sale of electricity sold outside the factory - liability to pay the amount at 6% when admittedly the respondent has reversed the proportionate credit of inputs and input services attributable to sale of electricity - liability to pay as per Rule 6(3) of the Cenvat Credit Rules - electricity generated from waste gas / tail gas - classifiable under Chapter Heading 27 16 00 00 and whether the same can be said to be ‘exempted goods’ or not - waste gas or tail gas as obtained from process of manufacture as defined in Section 2 (f) of the Central Excise Act, 1944 - invocation of extended period of limitation - HELD THAT:- The decision in GULARIA CHINI MILLS AND OTHERS VERSUS UNION OF INDIA AND OTHERS [2013 (7) TMI 159 - ALLAHABAD HIGH COURT] which was affirmed by the Hon’ble Supreme Court in UNION OF INDIA VERSUS DSCL SUGAR LTD. [2015 (10) TMI 566 - SUPREME COURT] will also aid the case of the assessee. It was held that bagasse was a “waste” and hence, it was not manufactured of exempted goods and electricity generated from bagasse was neither excisable under Section 2(d) of the Central Excise Act, 1944, nor exempted good under rule 2(d) of the Cenvat Credit Rules 2004 and hence, Rule 6 of the said Rules is not applicable. In the present case it could not be pointed out as to whether any process in respect of Bagasse has been specified either in the Section or in the Chapter notice. In the absence thereof this deeming provision cannot be attracted. Otherwise, it is not in dispute that Bagasse is only an agricultural waste and residue, which itself is not the result of any process. Therefore, it cannot be treated as falling within the definition of Section 2(f) of the Act and the absence of manufacture, there cannot be any excise duty. The Tribunal rightly allowed the appeal filed by the assessee and set aside the order of adjudication - the appeal filed by the revenue is dismissed and the substantial questions of law are answered against the revenue.
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