TMI Blog2020 (2) TMI 1014X X X X Extracts X X X X X X X X Extracts X X X X ..... same to be called as the manufactured good of the Appellant. In the case of UNION OF INDIA VERSUS DSCL SUGAR LTD. [ 2015 (10) TMI 566 - SUPREME COURT] Hon'ble Apex Court while explaining the meaning of manufacture as contained in Section 2F of the Central Excise Act, 1944 has held that any waste emerging compulsorily during the procedure of manufacture cannot be called as the manufactured products. As such the Rule 6, CCR is not applicable - In view of the prior Circular of the department bearing No. 721/37/2003-CX dated 06.06.2003, it can be opined that explanation I to Rule 6 CCR, 2004 has been added to circumvent the outcome of the decision of Hon'ble Apex Court in UNION OF INDIA VERSUS DSCL SUGAR LTD. [ 2015 (10) TMI 566 - SUPREME COURT] . Accordingly, the confirmation of demand of ₹ 5,72,598/- on the left over/scrap of the input used by the Appellant, since Rule 6 is not applicable, the demand is not sustainable - demand set aside. Demand of ₹ 3722/- with respect to common input services used for taxable as well as non-taxable services - HELD THAT:- Since there is no denial for the Services as that of advertising services, legal services, director&# ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ute about the fact that the Appellants are mainly the exporter. However, whatever final product is being cleared to domestic market, the excise duty thereupon has duly been paid. 4. It is impressed upon that, admittedly, the impugned goods are the waste of packing material/leftover packing material which is used to pack the final product that is variety of Tires and Tubes manufactured by the Appellant before their export/domestic clearance. It is impressed upon that the said leftover/scrap is neither the exempted goods nor any difference is being created by the explanation one as was added to Rule 6 CCR, 2004 on 01.03.2015 alleging the demand confirmed to have been confirmed on wrong interpretation of the provision the order-under-challenge is prayed to be set aside. Ld. Counsel has laid emphasis upon Honda Motorcycle (supra) having identical facts to have been decided in favour of the assessee by this Tribunal. In addition the various other adjudications interpreting Rule 6 CCR has also been impressed upon that is : 1. M/s Kichha Sugar Company Ltd. Vs. CCE, 2018 (10) TMI 1151-CESTAT, New Delhi. 2. Honda Motorcycle and Scooter India Pvt. Ltd. Vs. CCE, Alwar, 2019 (4) TM ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the factory. Explanation 2.- Value of non-excisable goods for the purposes of this rule, shall be the invoice value and where such invoice value is not available, such value shall be determined by using reasonable means consistent with the principles of valuation contained in the Excise Act and the rules made there under. 7. The bare reading makes it clear that two conditions need to be fulfilled for the applicability of Rule 6 that is : 1. Input/input services is commonly used in the manufacturer of excisable and exempted goods. 2. Such input/input services is used in or in relation to the manufacture of excisable and exempted goods. 8. Word manufacture acquires the utmost importance for the applicability of Rule 6 and the Rule is applicable if and only if the Appellant is manufacturing exempted as well as excisable goods and the input/input services are commonly used for both kind of manufacture. 9. Apparently and admittedly, the goods as have been objected by the department are not the manufactured goods. These are merely the inputs that too in the form of the material used by the Appellant to pack their final product. This particular observation is su ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of above Explanation-1 reveals that it merely includes non-excisable goods within the ambit of the term exempted goods . At the same point of time, it fails to take non-manufactured goods into consideration. Simply out, Explanation 1 does not deem non-manufactured goods as exempted goods under Rule 2(d) of the Credit Rules. We agree with the contentions raised by the Appellant that Rule 6 requires reversal of credit only subject to satisfaction of twin conditions of manufacture and exempted goods. It is seen from the statutory provision that the Explanation 1, inserted with effect from March 1, 2015, includes non-excisable goods in the definition of term exempted goods in the following words: Explanation 1.- For the purpose 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 . In this context, it is noteworthy that aluminium dross has been held to be non-manufactured in Hindalco Industries Limited Vs. UOI, 2015 ELT 10 (Bom.). Further, much of the impugned scrap was not even involved in any sort of processing activity. As noted above, the impugned ..... X X X X Extracts X X X X X X X X Extracts X X X X
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