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2023 (3) TMI 1207 - AT - Central ExciseInput Tax Credit - input - Molasses - clearance of Extra Neutral Alcohol (potable and non-excisable) - main allegation of the department is that molasses is used for manufacture of ENA which is non-excisable - HELD THAT:- The appellant did not avail CENVAT Credit of the duty paid on molasses immediately on receiving the molasses in the factory. Though they manufactured non-excisable ENA and also dutiable products viz, acetaldehyde and acetic acid, they have availed credit only on that part of molasses which go into manufacture of dutiable product. Department has no allegation that they have availed credit on the entire quantity of molasses. The Credit that is eligible in respect of dutiable products will be known only when the appellant knows what quantity of alcohol denatured and how much molasses is used in such excisable product captively consumed in further manufacture of dutiable products cleared from the factory. The main allegation is that as ENA is derived at the first stage which is non-excisable and therefore the credit availed is not in order. In the case of M/s. Shri Ambika Sugar Ltd. [2014 (11) TMI 919 - CESTAT CHENNAI] similar view was taken by the Hon’ble Apex Court as reported in COMMISSIONER VERSUS SHREE AMBIKA SUGARS LTD. [2015 (12) TMI 1887 - SC ORDER]. In Godavari Sugar Mills Ltd. Vs Commissioner of Central Excise, Belagaum [2006 (11) TMI 497 - CESTAT, BANGALORE] it was held that it is sufficient if CENVAT Credit attributable to inputs in exempted product is reversed or paid. In case on hand, though the appellants have resorted to different method, it is clear that the appellants have not availed CENVAT Credit on inputs in respect of exempted products or non-excisable ENA. Following the proposition laid in the above decisions, it is held that the demand cannot sustain. The impugned order is set aside. Appeal allowed.
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