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2018 (10) TMI 1151 - AT - Central ExciseCENVAT Credit - by-product/waste - bagasse & press-mud arising out of manufacture of V P Sugar & molasses - Rule 6 (3) of CCR - whether the impugned waste invites the payment of excise duty in accordance of Rule 6 (3) of CCR, 2004? Held that:- The Hon’ble Apex Court in the case of Union of India vs. DSCL Sugar Ltd [2015 (10) TMI 566 - SUPREME COURT] has held that products like bagasse and press-mud do not qualify the definition of Section 2F of CEA and as such are not being a manufacture. These are only an agricultural waste and residue which itself is not the result of any process and in the absence of manufacture, there cannot be any excise duty. The Hon’ble Apex Court further clarified that since it is not a manufacture, Rule 6 of the Cenvat Credit Rules shall have no application. This rule was amended w.e.f. 01.03.2015 - however, since the main condition for Rule 6 is still, “obligation of a manufacturer or producer of final products”, it doesn’t extend to by- products released during the process of manufacture of main product that too without involvement of any such activity, which may be called as manufacture. Thus, irrespective of the amendment, there arises no liability upon the appellant to pay the duty as demanded for the period w.e.f. September, 2014 to February, 2015, nor for the reversal of the credit as demanded for the period June, 2015 to March, 2016 - appeal allowed - decided in favor of appellant.
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