TMI Blog2015 (2) TMI 265X X X X Extracts X X X X X X X X Extracts X X X X ..... Revenue. - Appeal No. E/1470/09 - order No. A/63/15 - Dated:- 28-10-2014 - Anil Choudhary,JJ. For the Appellant : Shri V.K. Agarwal, Addl. Commissioner (AR) For the Respondent : None (Adjn. Request) ORDER Per: Anil Choudhary: This appeal by Revenue is preferred against Order-in-Appeal No. PII/PAP/177/2009 dated28.8.2009 passed by the Commissioner of Customs Central Excise (Appeals), Pune-II. 2. The brief facts are that the respondent assessee is manufacturer of sugar etc. and availed CENVAT Credit on certain inputs and input services, which are utilized in discharging the Central Excise duty both by debiting in CENVAT Credit as well as through PLA. During scrutiny of the record by Revenue, it was noticed tha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ugar, molasses as well as denatured spirit and rectified spirit in its factory. To process the sugar cane juice/generate the electricity required, steam was required. To generate steam, baggase was burnt into the furnace, which in turn created the heat required for generating the steam. The remnant from the burnt baggase (which is taken out of the boiler and furnace), is referred as boiler ash. Further stating that if boiler ash is not removed from the furnace, all the boiler and furnace would got clogged and then burning of baggase will become impossible which will hamper the generation of steam resulting into disruption in manufacture of sugar, molasses etc. Further, as per regulation of Pollution Control Board, the assessee cannot just t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing of human life and animals. As such, as directed by the Pollution Control Board, the assessee cannot throw away the waste material and is bound to arrange systematic disposal of the said waste. Accordingly, the assessee have built a compost pit, which is referred to as compost yard and in the said compost pit, they were dumping the press-mud and boiler ash, where due to natural cause, the said mixture of press-mud and boiler ash was got composted. Therefore, for handling the waste which arise in various section in the factory, for proper handling and composting and to maintain health, including waste in compost yard, the assessee hired the various labours through the Manpower Recruitment Agency, who were charging Service Tax on the charg ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... espect of input services used for removing the press-mud was allowed. Being aggrieved, the appellant preferred an appeal before the Commissioner (Appeals), wherein the Commissioner (Appeals) was pleased to hold that in place of electricity as input used in relation to manufacture, the man-power recruitment or supply agency services was used in relation to manufacture of the final product of the appellant. Accordingly, it was held that the appellant was eligible to avail CENVAT Credit of ₹ 86,640/- and, therefore, the appeal was allowed in favour of the respondent. 3. Being aggrieved, the Revenue is in appeal before this Tribunal on the ground that the Commissioner (Appeals) has failed to appreciate that as per Rule 3 of Cenvat Cred ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tuer of final products ends with the emergence of those final products along with inevitable wastes. Their usage cannot be traced beyond the first degree. 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. 16. As rightly contended by the learned counsel fo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 proc ..... X X X X Extracts X X X X X X X X Extracts X X X X
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