TMI Blog2013 (3) TMI 366X X X X Extracts X X X X X X X X Extracts X X X X ..... n to the manufacture of final products once again. The same inputs cannot be considered to have been utilised or used even indirectly in the manufacture of disputed item viz., bio-compost fertiliser, especially under the factual circumstances that the same came to be manufactured only by adding those two waste materials together. May be those two waste materials contained the trace of certain chemicals with the characteristics of original inputs. That itself cannot be taken to mean that the product emerged out of those wastes was also manufactured by using those cenvated credit inputs. As rightly contended by the assessee, the characteristic of sugar cane containing various chemicals cannot be stopped or prevented by the manufacturer to pass on even to the wastes, as it is undoubtedly a natural flow of in born character from one stage to another. Only when there is a further addition of inputs or chemicals with similar characteristics externally by the manufacturer, the Revenue can invoke Rule 57CC. When spent wash and press mud had emerged as inevitable wastes during the process of manufacturing of final products viz., sugar and Denatured Ethyl Alcohol and the said wastes are c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1.12.2003. 3. Case of the Revenue:- The first respondent is the manufacturer of Sugar, Molasses and Denatured Ethyl Alcohol. It was noticed by the preventive Officers that the first respondent manufactured Bio-compost fertiliser falling under Chapter Heading 3105.00 of the Central Excise Tariff Act, 1985 and availed credit of duty on inputs viz., Molasses, Acetaldehyde, Benzene and Toluene, Tyridin, Light Taoutchocine, Sulphuric Acid, Chloroform and Methonol which are the common inputs for both Bio-compost fertiliser as well as Denatured Ethyl Alcohol. Bio-compost fertiliser is exempted from payment of duty vide Notification No. 8/96 dated 23.7.1996 etc., whereas Denatured Ethyl Alcohol is a dutiable product. During the course of manufacture of sugar, a waste product called Press mud emerged and during the manufacture of denatured ethyl alcohol, another bi-product viz., spent wash emerged. The press mud and spent wash were treated together for about 40 days and out of such treatment, an organic manure viz., Bio-compost emerged. The said organic manure is sold as "Farm boon" and "Garden bloom" by the first respondent. On further verification of the lab report, in respect of spen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cohol, press-mud and spent wash. The said exempted final products viz., press-mud and spent wash are used in the manufacture of Bio-compost fertiliser, which is also exempted . Thus there is a common link/chain connecting the inputs used in the manufcture of Bio-compost fertiliser. iii) As per the provision of erstwhile Rule 57A of the Central Excise Rules, 1944 and Rule 6(3)(b) of CENVAT Credit Rules, 2002 credit is allowed on the inputs even if it is utilised indirectly or in relation to the manufacture of final product. iv) What is manufactured and marketed by the first respondent is not mere press-mud, but enriched press mud. The Tribunal failed to differentiate the issue involved in the case of Titawi reported in 2003 (152) ELT 121 (SC) with the issue on hand since the marketability of the press mud alone was the issue in that case. As no evidence on the marketability of press mud was placed by the Revenue before the Apex Court, it was held therein that the press mud was a non-excisable item. In this case, the first respondent assessee marketed the enriched press mud under the brand name "Farm Boon" and "Garden Bloom" . v) As "Farm Boon" and "Garden Boom" are final produ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... acted. v) Press mud was removed to compost yard where it was mixed with spent wash, to finally get the product viz., bio-compost fertiliser. Both press mud and spent wash are waste products emerged in the process of manufacture of sugar. vi) Rule 57C read with Rule 57CC contemplates payment of 8% of price of exempted products only when the manufacturer took credit of specific duty on any input which was used in or in relation to manufacture of final product. The mixture of press mud and spent wash did not derive their characteristics of manure from any of the modvatted or cenvated item, but from the characteristics of sugar cane, water and natural organic substances contained in them. vii) None of the credit availed input had been used in or in relation to manufacture of Bio-compost fertiliser as contemplated under Rule 57C(2). The inputs were brought into factory for manufacture of sugar. viii) Sugar cane itself contained chemicals such as potassium, Fluoride, Calcium, Magnesium, Phosphorous, Phosphatic, Iron, Carbonite Ash etc., and therefore the characteristics of press mud were relatable to sugar cane only and not to any modvatted input . ix) No cenvated inputs or che ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mpt from the whole of the duty of excise leviable there on or is chargeable to nil rate of duty and the manufacture takes credit of the specified duty on any input (other than inputs used as fuel) which is used or ordinarily used in or in relation to the manufacture of both the aforesid categories of final products, whether directly or indirectly and whether contained in the said final products or not, the manufacturer shall, unless the provisions of sub-rule (9) are complied with, pay an amount equal to eight per cent of the price (excluding sales tax and other taxes, if any, payable on such goods) of the second category of final products charged by the manufacturer for the sale of such goods at the time of their clearance from the factory. (2) The amount mentioned in sub-rule (1) shall be paid by the manufacturer by adjustment in the credit account maintained under sub-Rule (7) of Rule 57G or in the accounts maintained under Rule 9 or sub -Rule (1) of Rule 173G and if such adjustment is not possible for any reason, the amount shall be paid in cash by the manufacturer availing of credit under Rule 57A." 12. Rule 57CC contemplates that a manufacturer, who takes credit of specif ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... liser was also manufactured by using the cenvated credit inputs or chemicals. 14. Repudiating such contention of the Revenue, the first respondent would submit that they have not used any credit availed inputs while manufacturing bio-compost fertiliser and on the other hand those inputs were brought into factory and used in the manufacture of sugar only. It is also their case that sugar cane itself contained various chemicals such as potassium, Fluoride Calcium, Magnesium, Phosphorous, Phosphatic, iron, Carbonite Ash etc., and therefore the characteristics of press mud or spent wash are relatable to sugar cane only and not to any of the modvated inputs, which were used in the manufcture of sugar. Findings:- 15. We find force in the submission made by the first respondent assessee. Certainly, the cenvated inputs were brought into the factory by the assessee for using it in the manufacture of their final products viz., sugar, molasses, Denatured Ethyl Alcohol. Once they use those cenvated inputs at the initial stage and obtain certain final products as well as wastes such as press mud and spent wash, there was no further application or usage of those inputs either in or in rela ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he mixture of two waste products viz., press-mud and spent wash and is marketed by the assessee. What is to be seen is as to whether such final product had emerged by using any cenvated inputs either in or in relation to such manufacture of final product. As we have already found that no cenvated inputs or chemicals were used either in or in relation to the manufacture of such exempted final product viz., bio-compost fertiliser, we are of the view that demand made by the Revenue is unsustainable. 18. The learned counsel for the Revenue relied on the decision of the Apex Court reported in 2007 (214) E.L.T 481 (SC) (Collector of Central Excise V. Solaris Chemtech Limited) to contend that if manufacture of final product cannot take place without the process in question then that process is an integral part of the activity of manufacture of the final product. Thus, the learned counsel by taking support from such decision contended that the words "in relation to the manufacture of final product" should convey the expanded meaning in order to bring even the inputs which even do not enter into finished goods. In the above said decision of the Apex Court, the facts show that inputs viz., ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... m Phosphate, there would be no question of maintaining separate accounts for receipt, consumption and inventory of input. In that case, the Gujarat High Court relied on the decision of the Hon'ble Supreme Court in the case of Commissioner Vs. National Organic Chemical Industries Limited (2008 (232) E.L.T.193 (S.C.) 23. The learned counsel also placed reliance on a decision of the Tribunal of the very same Bench which passed the present impugned order to the effect that bio-compost prepared by mixing press mud and effluents from distilleries is not exigible to excise duty and consequently Rule 57CC is not invocable. It is represented that the said decision of the Tribunal on the same issue reported in 2008 (232) ELT 633 (Tri Chennai) (Commissioner of Central Excise, Tirunelveli Vs. Dharani Sugars Chemicals Ltd.) has been accepted by the Revenue and no further appeal is filed before this Court and thus became final. 24. Likewise another decision of the Tribunal of Bangalore Bench reported in 2009 (235) ELT 873 (Tri Bang) (Navabharat Ventures Ltd., Vs. Commissioner of Central Excise, Visakhapatnam) is also placed before us, wherein it has been held that the very same bio-compost ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... with sugarcane juice for "ethylene glycol interacts with DMT" and Bio-compost for "methanol", in the above case , we are of the view that the ratio laid down by the Hon'ble Supreme Court squarely applies to the present case. The first respondent is not engaged in the production of bio-compost; but in the production of sugar and ethyl alcohol. It is not as if any extra chemicals are added for production of bio-compost. It is the product that emerges out of mixture /treating of two inevitable wastes viz., Press mud and Spent wash. 29. It is also brought to our notice that the Hon'ble Apex Court in a decision reported in 2003 (152) ELT 21 (SC)(Commissioner of Central Excise Meerut Vs.Titawi Sugars Complex) has observed that press mud is not a marketable commodity. No doubt the learned counsel for the Revenue submitted that the said decision came to be made only because of the fact that the Revenue was not in a position to establish the marketability of such commodity. On the other hand, it is submitted that the assessee in this case is admittedly selling those products viz, bio-compost and therefore they cannot rely on the said decision. Certainly the issue of marketability of bi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the very same issue in this appeal in respect of another assessee. If an issue is decided in favour of any party and had attained finality and accepted by the parties, the affected party in that case is certainly precluded from questioning its correctness in an another case. At this juncture, the decision of the Apex Court reported in 2006 (202) E.L.T 213 (SC) (Commissioner of Central Excise, Navi Mumbai Vs. Amar Bitumen Allied Products Pvt. Ltd.,) is relevant to be quoted. Paragraphs 4 to 7 are usefully extracted hereunder:- "4. The Tribunal relying upon an earlier decision of another Bench of the Tribunal in Commissioner of Central Excise, Calcutta -I V.Bitumen Products (India) (1999(107) E.L.T. 58 (T), held that 'Bituminised Hessian based felt' is covered under Chapter Heading 59.09 as contended by the assessee and not under 68.07 as contended by the revenue. 5. Admittedly, no appeal was filed by the Revenue against the earlier decision of the Tribunal in Bitumen Products (India) (supra) and the same has become final. 6. This Court in a catena of cases has consistently taken the view that if an earlier order is not appealed against by the Revenue and the same has attain ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... es in a quandary." 8. Since the point involved in the present case is identical to the point decided in Hindustan Gas and Industries case (1996 (88) E.L.T 413 (CEGAT) and the Department having accepted the principle laid therein to the effect that the inserts did not require any precision machining or that any such machining was done by the appellant, cannot be permitted to take a stand different than the principles laid down in the earlier case. " 33. Going by the above decisions of the Apex Court, we are of the firm view that the Revenue cannot pick and choose between the assessees of same nature to file appeal in respect of the very same issue. The Tribunal has also pointed out that the Commissioner who had taken the view in this case in favour of the Revenue is the very same Commissioner, who as an appellate authority took different view in favour of the assessee in another case. This sort of inconsistency need to be avoided. 34. In the result, the appeal filed by the Revenue is dismissed by answering the questions of law in favour of the assessee and against the Revenue. 35. In respect of other appeals in C.M.A.No. 1352 of 2008, C.M.A.No.1122 of 2009, C.M.A.Nos.638 and ..... X X X X Extracts X X X X X X X X Extracts X X X X
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