2016 (8) TMI 942

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..... Central Excise, Salem dated 28.11.2007 passed in No.10/2007. 2. Short facts leading to the appeal are that the respondent, namely M/s.Salem Co-operative Sugar Mills Ltd., is engaged in manufacture of sugar falling under Chapter 1701. Molasses manufactured during the course of manufacture of sugar is being captively consumed on payment of duty for manufacturing natural alcohol, denatured spirit and ethanol in their distillery plant. They also procure molasses on payment of duty from outside. They had availed cenvat credit of duty paid on both molasses manufactured by them and bought out molasses. They utilised the Cenvat credit availed on molasses for payment of duty on final products. They used to reverse the Cenvat credit attributable on .....

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..... envat Credit Rules, 2004, alleging contravention of the said Rules. 4. Aggrieved by the same, an appeal was filed under Section 35B of the Central Excise Act, 1944 before the Customs, Excise and Service Tax Appellate Tribunal (CESTAT), Chennai, which dismissed the appeal. Thus the present appeal is filed under Section 35G of the Central Excise Act, 1944 on the following substantial questions of law. "1. Whether the Tribunal is correct in holding that the respondent had correctly discharged the obligation under Rule 6(3) of the Cenvat Credit Rules, 2004? 2. Whether the Tribunal is correct in deleting the mandatory penalty?" 5. Heard both parties. 6. After hearing Mr.V.Sundareswaran, learned Senior Standing Counsel (Central Excise) app .....

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..... iled on the exempted goods. (iv) Deletion of penalty is unwarranted. 8. On the side of the respondent, Mr.Hari Radhakrishnan, learned counsel for the respondent submitted that the following issues requires for consideration: 1. Whether the undenatured ethyl alcohol/rectified spirit manufactured by the assessee are "exempted goods" in terms of Rule 2(d) of the Cenvat Credit Rules, 2004 and consequently whether the provisions of Rule 6(3) of the Cenvat Credit Rules, 2004 apply to the present case? 2. Whether the assessee is liable to pay 10% of the value of undenatured ethyl alcohol/rectified spirit at all in terms of Rule 6(3)(b) of the Cenvat Credit Rules, 2004? 9. Both the learned counsel for the parties, have consented for the ord .....

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