TMI Blog2019 (10) TMI 1100X X X X Extracts X X X X X X X X Extracts X X X X ..... ule 6 of the Cenvat Rules shall have no application in the present case and they are bound to come into existence during the crushing of the sugarcane and are an unavoidable agricultural waste. The amendment dated 1.3.2015 in Rule 6 ibid has wrongly been relied upon by both the authorities below while coming to the conclusion that the assessee is liable to reverse the Cenvat Credit availed by them. The Hon ble Supreme Court in the matter of D.S.C.L. Sugar Ltd. has laid down that bagasse being an agricultural waste or residue, there could be no manufacturing activity. If that is so and if bagasse is not manufactured, the same cannot be held to be excisable, in which case the amendment which has been relied upon by the authorities below ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... xcisable goods viz. Sugar, Molasses which are cleared on payment of duty. During the course of manufacture of sugar and molasses, by product Babasse emerges which is a waste/residue byproduct/refuse. The assessee are availing Cenvat Credit of duty paid on various inputs, capital goods and service tax paid on various input services in terms of Cenvat Credit Rules. According to Revenue, bagasse is capable of being sold and appeared to be excisable goods and the tariff rate of duty for bagasse is NIL and therefore it is exempted from whole of the duty of Central Excise, but the assessee are not maintaining any separate account of inputs/input services used for manufacture of both exempted and duty paid goods as provided in Rule 6(2) ibid nor p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ot required to be reversed. He cited number of decisions in his favour starting from Hon ble Supreme Court upto this Tribunal, in support of his argument that reversal of Cenvat Credit under Rule 6 is not required in respect of waste or byproduct or refuse generated during the process of manufacturing. The list of the cases cited by learned counsel are as under:- (i) M/s. Balrampur Chini Mills Ltd. vs. UOI; 2019(5)TMI 972 (All.HC) (ii) M/s. Athani Sugars Ltd. vs. Commr.CGST; 2019(2) TMI 379-Ces.-Mum (iii) CCT, Pune-II vs. Chhatrapati SSK Ltd.; 2019(2) TMI 1301- Cestat Mumbai (iv) M/s.Pannageshwar Sugar Mills Ltd.vs.CCE ST; 2018(10) TMI 966- Ces.Mum ( ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... alongwith the Appeal, Revenue also filed three decisions, but in my view none of them is on the issue about Cenvat Credit on waste produced during the production of excisable goods and are not relevant for deciding the issue involved in the instant Appeals. 4. Cenvat Credit Rules, 2004 were amended w.e.f. 1.3.2015 by inserting Explanation 1 and 2 in Rule 6(1), which reads as under:- Explanation 1. - For the purposes of this rule, exempted goods or final products as defined in clauses (d) and (h) of rule 2 shall include non-excisable goods cleared for a consideration from the factory. Explanation 2. - Value of non-excisable goods for the purposes of this rule, shall be the invoice valu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... factured by the manufacturer in his factory will get covered under Rule 6(1) and those goods which were not manufactured, like bagasse in these appeals, will not be covered under Rule 6 despite being non-excisable goods because bagasse is not being manufactured in the factory but emerged as agricultural waste or residue. Rule 6(1) was amended in order to include the inputs used in relation to the manufacture of exempted goods. As such it can be seen that the same relates to the manufacture and it can safely be concluded that there has to be a manufacturing activity for invoking the aforesaid Rule. The Hon ble Supreme Court in the matter of D.S.C.L. Sugar Ltd.(supra) has laid down that bagasse being an agricultural waste or residue, there ..... X X X X Extracts X X X X X X X X Extracts X X X X
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