TMI Blog2024 (4) TMI 1036X X X X Extracts X X X X X X X X Extracts X X X X ..... (TECHNICAL) Shri M.N. Bharathi, Advocate for the Appellant Shri M. Selvakumar, AC (AR) for the Respondent ORDER Facts that emerge from the Order in Original are that the appellant is a manufacturer of ethyl alcohol Rectified Spirit, Ethanol and Extra Neutral Alcohol, all non-excisable products, which same would be cleared for home consumption. Further, they also manufactured molasses in their sugar plant, which was captively used in their plant in the manufacture of, among other dutiable products, RS and ENA, in respect of which the appellant was availing the exemption under Notification No. 67/95 CE dated 16.03.1995, as amended. This Notification had the effect of exempting inputs/capital goods used in the manufacture of final products which were exempted or that attracted Nil rate of duty. With effect from 01.03.2005, Rectified Spirit was omitted from the Heading to 2207 of the Schedule to the Central Excise Tariff Act 1985. It thus appeared to the Revenue that the Rectified Spirit was not an excisable goods and therefore, was not covered by the term final product the exemption claimed in terms of the above Notification 67/95 in respect of molasses used in the production of recti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... icals Ltd., Shree Ambika Sugars Ltd. The Tribunal vide Final Order No.40789-40799/2014 dt. 20.11.2014 reported in 2016 (343) ELT 462 (Tri.- Chennai) held that the denial of Exemption Notification No.67/95-CE on molasses captively consumed to manufacture Rectified Spirit and Extra Neutral Alcohol (ENA) cannot be justified. Accordingly, denial of credit on molasses was also set aside. The said decision was upheld by the Apex Court as reported in 2022 (379) ELT 556 (SC). Relevant part of the said final order of the Tribunal is noteworthy and reproduced as under: 8.3 We find that the present dispute is emerged due to restructuring of the Tariff from 6 digit to 8 digit. CBEC vide Circular No. 808/5/2005-CX, dated 25-2-2005 regarding implementation of Tariff from 6 Digit to 8 Digit, clarified as under :- Implementation of the Central Excise Tariff (Amendment) Act, 2004 (8- Digit Classification Code) - Clarification regarding. I am directed to draw your attention to this Department s Notification No.6/2005-C.E. (N.T.), dated 24-2-2005, issued from F.No.4/3/2002-CX.I (Part-II), which notifies that the Central Excise Tariff (Amendment) Act, 2004 will come into force with effect from 28th Fe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... all the rules made under the said section and all the notifications issued under the said rules and for the time being in force on the date of commencement of the Central Excise Tariff (Amendment) Act, 2004 (5 of 2005), except as respects things done or omitted to be done before such amendments, namely:- 1.(1) These rules may be called the Central Excise (Removal of Difficulties) Rules, 2005. (2) They shall come into force on the date of the commencement of the Central Excise Tariff (Amendment) Act, 2004 (5 of 2005). 2. In each of the rules made under Section 37 of the Central Excise Act, 1944 (1 of 1944), and in each of the notifications issued under these rules, for any reference to the Chapter, heading or sub-heading of the First Schedule or the Second Schedule to the Central Excise Tariff Act, 1985 (5 of 1986), as the case may be, relating to any goods or class of goods, wherever referred to in the said rules or notifications, the corresponding reference to the Chapter, heading or sub-heading or tariff item, of the First Schedule or the Second Schedule to the Central Excise Tariff Act, 1985 (5 of 1986), as amended by the Central Excise Tariff (Amendment) Act, 2004 (5 of 2005) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , can alone be treated as exempted goods for the purposes of Rule 6(3) of 2004 Rules, does not apply to electrical energy. . . 8.9 The learned AR for Revenue relied upon the decision of the Hon ble Bombay High Court in the case of Niphad Sakhar Karkhana Ltd. v. CCE - 2014 (300) E.L.T. 66 (Bom.). In that case, the assessee filed appeal along with stay application before the Tribunal. By stay order, the Tribunal directed the assessee to pre-deposit a sum of Rs. One crore out of Rs. 1.14 crores in accordance with the provisions of Section 35F of the Central Excise Act, 1944. The Hon ble High Court directed the Tribunal to decide the stay application afresh considering the decisions to take prima facie view whether they are applicable to the facts of the impugned case before directing pre-deposit. The learned AR also relied upon the decision of the Tribunal in the Ugar Sugar Works Ltd. (supra), which we have already discussed above. In the case of Kothari Sugars Chemicals Ltd. v. CCE - 2010 (262) E.L.T. 545, the Tribunal remanded the matter. In the case of Venkateshwara Winery Distillery Ltd.v. CCE - 2013 (295) E.L.T. 306, the Tribunal granted stay. In our considered view, none of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... AR for the Revenue has no merit. Apart from that, the Hon ble Supreme Court in the case of Vikram Cement Ltd. - 2006 (194) E.L.T. 3 (S.C.) held that the schemes of Modvat and Cenvat credit are not different. 8.12 It is seen from the above, that after re-structuring of Central Excise Tariff from 6 Digit to 8 Digit with effect from 1-3-2005, Rectified Spirit and ENA are exempted by Notification No. 3/2005-C.E. (supra) and the appellant discharged the obligations under Rule 6 of the Cenvat Credit Rules, 2004 in respect of clearance of Rectified Spirit and ENA and therefore, denial of exemption Notification No. 67/95-C.E. (supra) on Molasses captively consumed in Rectified Spirit and ENA cannot be sustained. Accordingly, denial of Cenvat credit on the Molasses purchased from other sugar mill used in the manufacture of Rectified Spirit and ENA are also liable to be set aside. We have also noted that inputs and input service are not exclusively used for generation of electricity and therefore, Cenvat credit cannot be denied. 5. After appreciating the facts, evidence and following the above decision, we are of the considered opinion that the demand cannot sustain and requires to be set as ..... X X X X Extracts X X X X X X X X Extracts X X X X
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