TMI Blog2012 (7) TMI 905X X X X Extracts X X X X X X X X Extracts X X X X ..... e any difference in the facts and, circumstances of the case. Moreover, neither the show-cause notice nor the impugned order in appeal mentions as to which common CENVAT credit availed inputs have been used in manufacture of sugar and molasses (dutiable final products) and bagasse (exempted final product). Since Bagasse emerges at sugarcane crushing stage, there is no possibility of any input-chemicals etc. having been used at that stage. The expression exempted goods has been defined for the purpose of CENVAT Credit Rules in Rule 2(d) to mean excisable goods which are exempt from the whole of duty of excise leviable thereon and includes goods which are chargeable to nil rate of duty. As per this definition, the impugned goods namely ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t Rules, 2004, on the price of bagasse and press mud and the demands are confirmed. 3. The applicants submitted that bagasse and press mud can be treated as manufactured goods and the issue is settled by the decision of the Hon ble High Court of Allahabad in the case of Balrampur Chini Mills Ltd. vs. Union of India and Others in Writ Petition No. 11791 (M/B) of 2010 order dated 18.5.2012 after relying the decision of the Hon ble Supreme Court in the case of CCE Vs. Shakumbhari Sugar Allied Industries Ltd. 2005 (189) ELT 62 (SC) whereby the Hon ble Supreme Court held that the bagasse is nothing but a waste obtained during manufacture of sugar and cannot be regarded as a final product exempt from duty. The applicant also relied upon t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nufacture of sugar and molasses and therefore, it cannot be said that the same are not excisable goods. As the goods are produced during the manufacture of sugar and molasses and nil rate of duty are applicable and the demands are rightly made. 5. We find that the demand is confirmed by invoking the provisions of Rule 6 of CENVAT Credit Rules, 2004 which provides that in case of manufactured products, both dutiable as well as exempted goods by availing credits in respect of common inputs, the manufacturer has to maintain separate account for the manufacture of exempted goods. In case, the manufacturer is not maintaining separate accounts, the manufacturer is liable to pay 5%-10% of the price of the exempted goods. The case of the Reve ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... arcane. Therefore, by no stretch of imagination it can be said that the assessee possible could have maintained separte account for the inputs for production of sugar and molasses (excisable item) andd bagasse. Thus, in our considered view, the amendment in Finance Act, cited by Shri Nagesh Pathak, AR and the Board Circular would not make any difference in the facts and, circumstances of the case. Moreover, neither the show-cause notice nor the impugned order in appeal mentions as to which common CENVAT credit availed inputs have been used in manufacture of sugar and molasses (dutiable final products) and bagasse (exempted final product). Since Bagasse emerges at sugarcane crushing stage, there is no possibility of any input-chemicals ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ey cannot be considered to be excisable as excisability implied manufacture and marketability. However, the main definition of excisable goods under Section 2(d) is as under:- Excisable goods means goods specified in the First Schedule and the Second Schedule to the Central Excise Tariff Act, 1985 (5 of 1986) as being subject to a duty of excise and includes salt . The definition itself implies that goods must be specified in the First Schedule or Second Schedule of the Central Excise Tariff Act, 1985, 1985, and the same should be subjected to a duty of excise. In the instant case, no doubt, the impugned items namely press mud and sludge are specified in the First Schedule to the Central Excise Tariff Act, 1985 against Heading No. 2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as held that when common inputs are used in manufacture of dutiable and exempted products, the liability to pay the amount of 8% as it was applicable at the relevant time would arise only for final products and not for waste. This decision of the Hon ble Bombay High Court has been applied by this Bench in the case of M/s. Sterling Biotech (supra). In the case of Vishal Pipes (supra), the Division Bench of the Tribunal has also referred to the Board s Circular No.345/61-97-CX dated 23.10.1997 to the effect that there should be no denial of credit even if a part of an input is contained in scrap, waste, residue etc. notwithstanding the fact that the erstwhile Rule 57D was no longer in force. 7. Further, paragraph 3.7 in Chapter 5 of the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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