TMI Blog2007 (6) TMI 471X X X X Extracts X X X X X X X X Extracts X X X X ..... nd M.N. Bharati, Advocates, for the Appellant. Smt. R. Bhagya Devi, SDR, for the Respondent. [Order per : P. Karthikeyan, Member (T)]. The subject appeal seeks to vacate the demand of duty and cess to the tune of Rs. 2,38,45,050/-, interest thereon and penalty equal to duty amount imposed on the appellants M/s. Sakthi Sugars Limited (SSL for short). The facts of the case are that SSL manufactures sugar, molasses and rectified spirit (Ethyl Alcohol). The assessee clears rectified spirit as such and as denatured spirit. Whereas the rectified spirit is exempted from payment of duty, denatured spirit is subject to excise duty. Molasses which is a by-product emerging in the manufacture of sugar is captively consumed to produce rect ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ischarge certain obligations as prescribed in Rule 6 of CCR, 2002. As per sub-rule (3)(a)(i) of Rule 6 of Cenvat Credit Rules, 2002, if the manufacturer did not maintain separate accounts of receipt, issue and inventory of inputs going into the manufacture of dutiable and exempted final products, he should pay an amount equivalent to the cenvat credit taken on the inputs used in the manufacture of the final products if such final products fell under Heading No. 22.04 of the I Schedule to the CETA 1985. In the instant case the final products were rectified spirit (Ethyl Alcohol) of Heading No. 22.04 of the CET. The ld. Counsel submitted that the appellants had reversed input credit availed during the material period to the tune of Rs. 6,71,5 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ore, the Notification benefit cannot be available. This is the main contention of the Revenue for denying the benefit of Notification to molasses captively consumed. However, it is the appellants contention that the molasses is not completely used for the production of exempted/non-dutiable product because a part of Rectified Spirit is converted to Denatured Spirit which is dutiable. Our attention was invited to amendment to Notification No. 67/95-C.E. by Notification No. 31/2001-C.E. dated 1-1-2001. In terms of the said amendment, the appellants are entitled for the benefit of the exemption Notification in a situation where there is manufacture of both dutiable and exempted final product, provided the manufacturer discharges the obligatio ..... X X X X Extracts X X X X X X X X Extracts X X X X
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