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2016 (10) TMI 66 - CESTAT ALLAHABAD

2016 (10) TMI 66 - CESTAT ALLAHABAD - TMI - Reversal of cenvat credit - Rule 6(3) of Cenvat Credit Rules, 2004 - electricity generated out of Bagasse - consideration received by appellant for supply of electricity to the State Grid of Electricity - Held that:- the issue has been finally decided by the Hon'ble Supreme Court in the case of Union of India Vs. DSCL Sugar Ltd. [2015 (10) TMI 566 - SUPREME COURT] wherein the Hon'ble Supreme Court of India have held that Bagasse is only an agricultural .....

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[DB] - Final Order No. 70710-70712/2016 - Dated:- 4-8-2016 - Mr. Anil Choudhary, Member (Judicial) And Mr. Anil G. Shakkarwar, Member (Technical) Shri Kapil Vaish, C. A., for the Appellant Shri Rajeeve Ranjan , Joint Commr. (A.R.), for the Department ORDER Per Mr. Anil G. Shakkarwar These three appeals are being taken up together for decision for the reason that all the three are related to provision of Rule 6 of Cenvat Credit Rules, 2004 in respect of Bagasse and Electricity. 2. The brief facts .....

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o March, 2010, since common inputs were used in the manufacture of exempted Bagasse and other dutiable products. An amount of ₹ 2,81,395/- was demanded through said Show Cause Notice dated 01-10-2010. Thus, the demand was confirmed through Order-in-Original dated 09-03-2011, and equal penalty was also imposed. The appellant preferred appeal before the Commissioner (Appeals) who decided the said appeal through Order-in-Appeal No. 98-CE/MRT-I/2012 dt.18.04.2012. The ld. Commissioner (Appeals .....

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ricity was sold to State Grid of Electricity for consideration and under Rule 6(3) ibid amount as provided by said Rule, needs to be recovered on the consideration received on sale of such electricity. So, through the said three Show Cause Notices, an amount of ₹ 47,11,947/- was demanded under Rule 6(3) of Cenvat Credit Rules, 2004. The said three Show Cause Notices were adjudicated through Order-in-Original dated 17-10-2012, wherein the said amount was confirmed and equal penalty was impo .....

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dated 10-02-2012, covering the period from April, 2011 to October, 2011, demanding an amount of ₹ 3,40,525/-, under said Rule 6(3) of Cenvat Credit Rules, 2004, on the consideration received by appellant for supply of electricity to the State Grid. The said Show Cause Notice was adjudicated through Order-in-Original dated 28-01-2013, where the Original Authority has confirmed the demand of ₹ 3,40,525/- and imposed equal penalty. The appellant has preferred appeal before Commissioner .....

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Further, as provided in Section 3 of Central Excise Act, 1944, read with relevant Tariff item for electricity in the First Schedule of Central Excise Tariff Act, 1985 where the electricity has not been provided with any rate of Central Excise duty, electricity is not excisable goods and provisions of Rule 6(3) do not get applied to electricity. 7. The ld. Counsel for the appellant has reiterated the submissions in the grounds of appeal and submitted a copy of the case law in the case of "Un .....

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uch action to be erroneous. The relevant extract of above stated Ruling of Hon'ble Supreme Court is as follows:- 2. The facts in brief are as under : 3. Respondents herein are manufacturer of sugarcane and molasses falling under Chapter sub-heading 1701 11 90 and 1703 10 00 respectively, of the First Schedule to the Central Excise Tariff Act, 1985. In the process of manufacture of sugar, sugarcane is crushed, its juice is extracted and Bagasse emerges as residue/waste of sugarcane. 4. It is .....

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ing various amounts. The said show cause notices were challenged by the respondents filing writ petitions in the High Court of Allahabad. The High Court has allowed these writ petitions holding that Bagasse being a waste and not a manufactured product, no duty is payable thereupon. For arriving at this conclusion, the High Court also have relied upon the judgment of this Court in Balrampur Chini Mills Ltd. in C.A. No. 2791 of 2005 decided on 21-7-2010 [2015 (320) E.L.T. A258 (S.C.)]. 6. The afor .....

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anation - for the purposes of this clause, goods includes any article, material or substance which is capable of being bought and sold for a consideration and such goods shall be deemed to be marketable. 7. As per the aforesaid explanation, goods would now include any article, material or substance capable of being bought or sold for consideration and as such goods shall be deemed to be marketable. Thus, it introduce the deeming fiction by which certain kind of goods are treated as marketable an .....

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ral Excise Tariff Act, 1985 (5 of 1986) as amounting to [manufacture; or] (iii) which in relation to the goods specified in the Third Schedule, involves packing or repacking of such goods in a unit container or labelling or re-labelling of containers including the declaration or alteration of retail sale price on it or adoption of any other treatment on the goods to render the product marketable to the consumer; and the word manufacture shall be construed accordingly and shall include not only a .....

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manufacture in respect of which process is specified in the Section or Chapter notices of the First Schedule. 10. In the present case it could not be pointed out as to whether any process in respect of Bagasse has been specified either in the Section or in the Chapter notice. In the absence thereof this deeming provision cannot be attracted. Otherwise, it is not in dispute that Bagasse is only an agricultural waste and residue, which itself is not the result of any process. Therefore, it cannot .....

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