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M/s. Dharani Sugars & Chemicals Ltd., M/s. Subramaniya Siva Cooperative Sugar Mills Ltd. Versus CCE, Tirunelveli, CCE, Salem

2015 (5) TMI 22 - CESTAT CHENNAI

Denial of CENVAT credit - common inputs - whether common inputs used by appellant in the course of manufacture of sugar resulting in sugar as well as bagasse and press mud not liable to duty is entitled to CENVAT credit on the inputs used - Held that:- Following decision of CCE, Pondicherry Vs. EID Parry (I) Ltd. [2013 (3) TMI 366 - MADRAS HIGH COURT], Gularia Chini Mills Ltd. Vs. Union of India [2013 (7) TMI 159 - ALLAHABAD HIGH COURT] and Balrampur Chini Mills Ltd. Vs. Union of India [2013 (1) .....

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ENVAT Credit Rules, 2004, the appellant cannot be denied of the CENVAT credit on the common input used. - Decided in favour of assessee. - E/391/2012, E/511/2012, E/40316/2014 - Final Order No. 40422-40424 / 2015 - Dated:- 16-4-2015 - Hon ble Shri D.N. Panda, Judicial Member And Hon ble Shri R. Periasami, Technical Member,JJ. For the Appellant : Shri S. Muthuvenkataraman, Advocate For the Respondent : Shri B. Balamurugan, AC (AR) ORDER Per D.N. Panda Appeal No. E/391/2012 Learned counsel says th .....

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denial of CENVAT credit to the appellant on the common inputs. For the convenience of reading the said paragraphs 15 to 17 are reproduced as under:- 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 w .....

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utilized 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 r .....

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s inevitable wastes during the process of manufacturing of final products viz., sugar and Denatured Ethyl Alcohol and the said wastes are combined and treated together to form another final product viz., bio-compost, the said final product cannot be brought under Rule 57CC. 17. We are conscious of the fact that what is in dispute is not the question as to whether bio-compost fertiliser is a final product or not, but on the other hand the question is as to whether such final product is liable to .....

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tions. Bio-compost is the 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 R .....

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ommon input was used to manufacture sugar as well as bagasse. It was submitted on behalf of appellant that electricity generated were sold to Tamilnadu Electricity Board to avail equivalent unit of power at different place of manufacture of appellant. 4. Hon ble High Court of Allahabad in paragraphs 25 to 27 of the judgment in Gularia Chini Mills Ltd. Vs. Union of India 2014 (34) STR 175 (All.) held that if generation of power by appellant was neither using mineral fuels, mineral oils and produc .....

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ing, the above said paragraphs are reproduced below:- 25. It is not in dispute that petitioners do not avail Cenvat credit on any input and input services used in generation of electricity insofar as this fact has been admitted by the Assistant Commissioner as well as Commissioner, Central Excise, Lucknow vide letters dated 30-1-2013 and 21-2-2013, respectively. In order to become any goods to be an excisable goods , it has to fulfil the following conditions : (1) Goods must be manufactured; (2) .....

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se is not covered under Chapter 27. Similarly, Chapter 27 does not cover electrical energy produced by solar power, hydro power, wind power or from bagasse. Therefore, we are of the view that electrical energy is not an excisable goods nor it is exempted goods as defined in Rule 2(d) of the 2004 Rules. 27.?It is also relevant to mention here that Rule 6(1) provides that Cenvat credit shall not allow on such quantity of inputs which is used in the manufacture of exempted goods. For applicability .....

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