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2019 (11) TMI 123 - HC - Central ExciseCENVAT Credit - common input, input services used in dutiable goods (sugar and molasses) as well as exempted goods (bagasse and electricity) - Rule 6 (3A) of the Cenvat Credit Rules - N/N. 23/2004-CE (NT), dated 10th September, 2004. Is the CESTAT correct in holding that as electricity is not excisable, Rules 6(2) & (3) of the CENVAT Credit Rules, 2004 are not applicable and consequently input credit is admissible in the facts and circumstances of the case? HELD THAT:- The point on which the learned Tribunal has decided the appeal is a point of law, i.e., the excisability, or otherwise, of electricity. It is required to be decided on the basis of the prevalent statutory position, as reflected in the Act, read with the Tariff and the law laid down on the point, and is not dependent on adjudication of any disputed question of fact. Statutorily, therefore, there is no escape from the position, in law, that “electricity”, or “electrical energy”, is excisable. The Supreme Court has, in UNION OF INDIA VERSUS DSCL SUGAR LTD. [2015 (10) TMI 566 - SUPREME COURT] clearly held that bagasse is not an excisable item and, that, therefore, a demand under Rule 6 of the Cenvat Credit Rules, on the ground of sale of electricity generated from bagasse, could not sustain - The inevitable sequitur of the discussion is that the decision of the Tribunal, to allow the appeal of the respondent on the basis of the judgment of the High Court of Allahabad in GULARIA CHINI MILLS AND OTHERS VERSUS UNION OF INDIA AND OTHERS [2013 (7) TMI 159 - ALLAHABAD HIGH COURT], was justified, albeit for the reason that, as the electricity sold by the respondent was generated entirely from bagasse, and bagasse itself was in the nature of non-excisable waste/residue, no demand, posited on Rule 6(3)(i) of the Cenvat Credit Rules, could sustain against the respondent. The question of law, framed answered in the affirmative, and against the Revenue - Appeal dismissed.
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