9911796707
TMI Blog2023 (7) TMI 430X X X X Extracts X X X X X X X X Extracts X X X X ..... Rules, 2004 alongwith interest and penalty. 2. The issue involved herein is whether the appellant is liable to pay an amount equal to 6% of the sale value of exempted goods/products i.e. Bagasse, press mud, boiler ash and sludge generated during the manufacturing of sugar/molasses in terms of Rule 6(3) of Cenvat Credit Rules, 2004? 3. The appellants are manufacturer of sugar, molasses and ethyl alcohol and during the process of manufacturing sugar and molasses various by products bagasse, press mud, boiler ash and sludge were generated which, as per the appellants, are nothing but waste/residue byproduct/refuse and admittedly these by products have been sold by the appellants. As per the department the appellant has availed cenvat credit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... STAT Mumbai in which this Tribunal allowed the appeal filed by the assessee therein. The relevant paragraphs of the said decision are reproduced as under:- "xxx xxx xxx 4. The appellants are manufacturer of sugar and molasses and during the process of manufacturing sugar & molasses by-products 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 pro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bagasse and boiler ash and cleared the exempted goods without payment of duty. He further 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 o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ude 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 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. Xxx xxx xxx 9. In all the decisions of the Tribunal which has been cited by the learned counsel, a consistent view has ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 in my view the provisions of amended Rule 6(3) or Rule 6(2) ibid has no application and resultantly the demand raised by the revenue cannot sustain." 5. In ..... X X X X Extracts X X X X X X X X Extracts X X X X
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