TMI Blog2022 (12) TMI 6X X X X Extracts X X X X X X X X Extracts X X X X ..... g the process of manufacture of goods cannot be said to be result of any process. There is no manufacturing process involved in pressmud s production. Bagasse, pressmud and boiler ash are not goods but merely a waste or by-product therefore Rule 6 of the Cenvat Rules shall have no application in the such cases as they are bound to come into existence during the crushing of the sugarcane and are an unavoidable agricultural waste. The amendment dated 01.03.2015 in Rule 6 ibid has been wrongly relied upon by the authorities below in confirming the demand. As per Rule 6 ibid as amended, non-excisable goods which are manufactured by the manufacturer in his factory will get covered under it and pressmud/ bagasse/boiler ash will not be cove ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hargeable to duty as well as any other final product which is exempted from whole of duty or chargeable Nil rate of duty using Cenvat inputs. But here the manufacturer i.e. appellant here is not manufacturing bagasse or pressmud or boiler ash. These are by-products only and merely emerge as waste or residue while manufacturing sugar and molasses from sugar cane. None of the by-products falls within the definition of manufacture and in its absence nothing can be demanded from the appellant. It is not the case anywhere that after the amendment on 1.3.2015 by-products/ waste/residue have been included in the definition of manufacture and therefore the provisions of amended Rule 6(3) or Rule 6(2) ibid has no application and resultantly the de ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... maintain separate accounts for dutiable and exempted goods as provided under Rule 6(2)? 4. The appellants are manufacturer of sugar and molasses and during the process of manufacturing sugar molasses byproducts bagasse, press mud, boiler ash were generated which, as per the appellants, are nothing but waste/residue/refuse. It is admitted fact that the appellant sold the aforesaid by-products/ waste in the market. Accordingly for the periods December, 2015 to June, 2017 department issued three show cause notices dated 5.1.2018 8.1.2018 respectively demanding amount equal to 5% or 6% of sale value of Press mud Boiler Ash for violation of the provisions of Rules 6(2) 6(3) ibid along with interest and penalty. The Adjudicating Autho ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... submitted that pressmud, bagasse and boiler ash are capable of being sold and appeared to be excisable goods and the tariff rate of duty for pressmud is NIL and therefore it is exempted from whole of the Central Excise duty, but the appellants 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 paid an amount equal to 6% of the value as provided under Rule 6(3) ibid as amended vide notification dated 1.3.2015 as in view of the amendment in Rule 6 w.e.f. 1.3.2015 provisions of Rule 6 of Cenvat Credit Rules, 2004 are attracted for the clearance of Bagasse for a consideration even though they are non-excisable. 6. I have heard learned ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that the same relates to the manufacture and it can safely be concluded that there has to be a manufacturing activity before invoking the aforesaid Rule. The Hon ble Supreme Court in the matter of DSCL Sugar Ltd.(supra) has laid down that bagasse being an agricultural waste or residue, there could be no manufacturing activity. The aforesaid decision squarely applies on the facts of the instant appeals and apart from bagasse, since pressmud and boiler ash are also emerged as waste, the same also cannot be held to be excisable. 8. The way the learned Commissioner, in the impugned order, tried to distinguish the aforesaid decision of the Hon ble Supreme Court in DSCL Sugar Ltd. (supra) is completely contrary to judicial discipline, decorum ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... not above the Courts therefore it binds him as well. Judicial discipline and propriety demands that the Adjudicating Authority or the first Appellant Authority should follow the binding decisions of the Hon'ble Supreme Court/High Court and of course of the Tribunal and should refrain from making comments which are uncalled for. 9. In all the decisions of the Tribunal which has been cited by the learned counsel, a consistent view has been taken that bagasse, pressmud or boiler ash which emerges as a waste/byproduct, falls outside the scope of Rule 6 ibid. The amendment in Rule 6 might have the effect of treating the by-product to be exempted goods but it cannot result in treating them being manufactured goods, as the nature of bagas ..... X X X X Extracts X X X X X X X X Extracts X X X X
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