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2022 (8) TMI 7 - AT - Central ExciseCENVAT Credit - manufacture of dutiable and exempted goods (Bagasse and Bio Compost) by using common inputs - period May 2011 to September 2015 - applicability of Rule 6(1) of the Cenvat Credit Rules, 2002 - HELD THAT:- Reliance placed in the case of UNION OF INDIA VERSUS DSCL SUGAR LTD. [2015 (10) TMI 566 - SUPREME COURT] where it was held that 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. In respect of observations made on the basis of CBEC Circular dated 25.04.2015 (referred in Order of Ld.Commissioner(Appeals), the Hon’ble Allahabad High Court in the case of M/S BALRAMPUR CHINI MILLS LTD. THROUGH ITS GENERAL MANAGER VERSUS UNION OF INDIA, MINISTRY OF FINANCE DEPARTMENT OF REVENUE [2019 (5) TMI 972 - ALLAHABAD HIGH COURT] has held that That the Circular dated 25-4-2016 interpreting Explanation 1 to Rule 6 has provided that “consequently, Bagasse, dross and skimmings of non-ferrous metal or any such by-product of waste, which are non-excisable goods and are cleared for consideration from the factory need to be treated like exempted goods for purpose of reversal of credit of input and input services, in terms of Rule 6 of the Cenvat Credit Rules, 2004. The circular therefore treating Bagasse to be a non-excisable goods, is clearly erroneous, and for this reason also the Circular dated 25-4-2016 is liable to be quashed with regard to Bagasse. The issue is squarely covered in the favour of the Appellant by the referred decisions - Appeal allowed - decided in favor of appellant.
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