TMI Blog2024 (3) TMI 275X X X X Extracts X X X X X X X X Extracts X X X X ..... d vide the aforesaid Circular dated 25.04.2016 had acknowledged that the said judgement applies to both the periods i.e the period pre as well as post insertion of explanation in Section 2(d) of Central Excise Act, 1944 (CEA, 1944) on 10.5.2008. It has been brought to the notice that this Circular was again challenged and the decision in UNION OF INDIA ORS. VERSUS M/S INDIAN SUCROSE LIMITED [ 2022 (7) TMI 353 - SC ORDER] by the Hon'ble Supreme Court has rescinded the said Circular re-affirming the findings in DSCL Sugar Ltd. Ors. case. Pursuant thereto the aforementioned Circular dated 25.04.2016 was withdrawn vide Circular No. 1054/2005 dated 07.07.2022. Perusal thereof clarifies that the decisions by Hon'ble Apex Court considering that the waste/by-product arising during the manufacture of excisable goods are not the result of the activity of manufacture have been accepted. Rule 6 of Cenvat Credit Rules talks about the obligation of the manufacturer who deals in manufacturing of exempted as well as excisable goods. The occurrence of a by-product/waste is not an activity of manufacture, the question of applicability of Rule 6 of CCR, 2004 does not at all arise. The finding ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... against the said order has been rejected by the Order-in-Appeal/order under challenge. Being aggrieved, the appellant is before this Tribunal. 2. We have heard Shri Krishna Mohan Menon a/w Shri Punit Sachdeva, Advocates for the appellant and Shri R. K. Mishra, Authorized Representative for the Respondent. 3. Learned Counsel for the appellant has mentioned that the Aluminium dross for which the duty has been demanded is a waste/by-product generated while manufacture of Aluminium products like, Aluminium ingots, wire rods etc. It is the said waste which is sold by the appellant without payment of excise duty. Since, the same is not a manufactured item, the question of applicability of Cenvat Credit Rules does not arises. 3.1 Learned Counsel has brought to the notice that the issue has already been decided in favour of the appellant holding that there is no manufacturing process involved in generation of Aluminium dross, hence, the provisions of Rule 6 are not applicable. Following decisions have been relied upon by the Learned Counsel as under:- CCE Raipur Vs Bharat Aluminium Company Ltd [2016 SCC Online CESTAT 4768] CCE Raipur Vs Bharat Aluminium Company Ltd [2015 (329) E.L.T 580 ( ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1944 (CEA, 1944) on 10.5.2008. The explanation to Section 2(d) reads as follows:- d) excisable goods means goods specified in (the First Schedule and the Second Schedule] to the Central Excise Tariff Act 1985 (5 of (1986)] as being subject to a duty of excise and includes salt, [Explanation. 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], Due to said explanation, Para 4.2 was incorporated in the said Circular dated 25.04.2016 despite Supreme Court s decision in DSCL (supra) case. The said para reads as follows:- 4.2 Consequently, Bagasse, Dross or waste and Skimmings of non-ferrous metals or any such by-product or waste which all non-excisable goods and are cleared for a consideration from the factory need to be treated like exempted goods for the purpose of reversal of credit of input and input services, in terms of rule 6 of the CENVAT Credit Rules, 2004 . 7. It has been brought to the notice that this Circular was again challenged and the decision in UOI vs. Indian Sucrose Ltd. in SLP ( C) -1700/2021 by the Hon'ble Supreme Court ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oduct is marketable. Hon ble Apex Court relied upon its previous decision in the case titled as Union of India Ors. Vs. Indian Aluminium Co. Ltd. another reported as 1995 Supp(2) SCC 465/1995 (77) ELT 268 SC wherein it was held that Dross and Skimmings of Aluminium is neither goods nor a marketable commodity. To counter this decision in Aluminium Co. Ltd. (supra) that the aforesaid explanation to Section 2(d) of CEA, 1944 was incorporated but stands rescinded by the decision in Sucrose India (supra) case. 9. This Tribunal in appellant s own case has also dealt with the issue with following observations, while deciding the issue in favour of the appellant:- It has held that the dross and skimming of Aluminium neither goods nor marketable commodities and, hence, are not liable to Excise duty. Though Apex Court's judgment pertains to the period prior to 1986 when there was no specific entry in the Central Excise Tariff for dross and skimming of non-ferrous metal in the Central Excise Tariff and the such dross and skimming was sought to be taxed under Tariff Item 68 of the Central Excise Tariff, and during the period of dispute there was a specific Heading 2620 covering the dross a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is dismissed'. 10. We observe that Rule 6 of Cenvat Credit Rules talks about the obligation of the manufacturer who deals in manufacturing of exempted as well as excisable goods. From the above discussion, it is clear that the occurrence of a by-product/waste is not an activity of manufacture, the question of applicability of Rule 6 of CCR, 2004 does not at all arise. The findings in the order under challenge since are based on applicability of said Rule 6 of CCR, 2004 and the Circular of 2016 which stands already been rescinded by the Hon'ble Apex Court, the order is not sustainable. The decision of Hon ble Supreme Court in Sucross India (supra) has been accepted by the Department itself by their subsequent circular. We hold that applying the rescinded circular that too to fasten a wrong excise duty liability is definitely an error apparent on record the order for the said reason and in view of entire above findings is not sustainable. It is apparent from record that Supreme Court s decision in Sucrose India (supra) as well as the Circular dated 07.07.2022 were brought to the notice of Commissioner (Appeals). Ignoring the outcome thereof is held to be an act of serious ju ..... X X X X Extracts X X X X X X X X Extracts X X X X
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