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TMI Blog2024 (8) TMI 992X X X X Extracts X X X X X X X X Extracts X X X X ..... No.67/1995-CE dated 16.03.1995 on the ground that it is used captively in the manufacture of Rectified Spirit in their distillery unit. During the period September 2007 to April 2008, they had utilised 16,500 MTs of Molasses manufactured for Captive consumption, on which they had claimed the exemption from payment of duty under Notification No.67/1995-CE dated 16.03.1995 as amended. They had paid a total duty amount of Rs.1,27,46,250/-, which later they claimed as refund on 12.08.2008 on the quantity of molasses cleared for captive consumption in their factory in the distillery unit for manufacture of Rectified Spirit and Neutral Alcohol during the said period. A show-cause notice was issued to them on 12.11.2008 proposing rejection of the said refund claim. On adjudication, refund claim was rejected by the Assistant Commissioner of Central Excise. Aggrieved by the said order, they filed appeal before the learned Commissioner (Appeals), who in turn rejected their appeal. Hence, the present appeal. 3. At the outset, the learned advocate for the appellant has submitted that in the impugned order, the refund has been primarily rejected on the ground that the molasses manufactured is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he show-cause notice as well as in the original proceeding and also before the first appellate authority, therefore, the same cannot be raised at this stage, being contrary to the settled principle of law. In support, he relied on the following judgments: * Commissioner of C. Ex., Chandigarh vs. Shital International: 2010 (259) ELT 165 (SC) * Commissioner of Customs, Mumbai vs. Toyo Engineering India Ltd.: 2006 (201) ELT 513 (SC) * Principal Commissioner vs. Fabrimax Eng. Pvt. Ltd.: 2018 (359) ELT 43 (Bom.) * Warner Hindustan Ltd. vs. Collector of Central Excise, Hyderabad: 1999 (113) ELT 24 (SC) * Gujarat State Fertilizers Co. vs. CCE: 1997 (91) ELT 3 (SC) * Hindustan Polymers Co. Ltd. vs. CCE: 1999 (106) ELT 12 (SC) * Reckitt & Colman of India Ltd. vs. CCE: 1996 (88) ELT 641 (SC) * CCE vs. Sanghi Threads: 2015 (321) ELT 180 (SC) * CCE vs. Sun Pharmaceuticals Indus. Ltd.: 2015 (326) ELT 3 (SC) * Caprihans India Ltd. vs. CCE: 2015 (325) ELT 632 (SC) * Baboohai Patel & Co. vs. CC: 1993 (68) ELT 734 (Bom.) * Ananya Knitting Company vs. Joint Secretary: 2007 (211) ELT 378 (Mad.) * CC, Ahmedabad vs. Krishna Petrochemicals: 2014 (304) ELT 744 (Tri.-Ahm.) 3.3 F ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ith the refund application. The Tribunal in the case of Shri Chamundeswari Sugars Ltd. (supra), following the judgment of Godavari Sugars Mills Ltd. (supra) decided the issue in their favour. The ROM filed against the said order has been rejected and an appeal filed before the Hon'ble High Court also resulted in dismissal. Further, SLP filed before Hon'ble Supreme Court, against the order of the Hon'ble Karnataka High Court, also got dismissed. 4. The learned Authorised Representative for the Revenue reiterating the findings of the learned Commissioner (Appeals) has submitted that there is no re judicata and estoppel applicable to taxation/fiscal matters and in support, he has referred to various judgments of this Tribunal. Further, he has submitted that all along, the department has been asking the appellant to submit the bifurcation figure of molasses consumed in the dutiable and exempted product which had not been submitted. 4.1 The appellant during the course of hearing submitted a copy of the refund application along with copy of statement showing the input credit reversed amounting to Rs.2,03,829/- for the period September 2007 to April 2008. He has submitted that the said ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pted goods. Since the appellant has not complied with the provisions, therefore, their refund has been rightly rejected. 5. Heard both sides and perused the records. 6. The short issue involved in the present appeal for consideration is: whether the appellants are eligible to refund of excise duty paid during September 2007 to April 2008 on by- product molasses, on its captive consumption(being exempted under Notification No. 67/95CE dated 16.3.1995, as amended) for the manufacture of exempted final products viz., Rectified Spirit and Extra Neutral Alcohol. 7. Undisputed facts are that the appellants are manufacturing sugar and in the process of manufacturing of sugar, molasses emerge as a by-product which in turn used in the manufacture of dutiable products viz., Fuse Oil, Denatured Spirit, Ethyl Alcohol and Carbon dioxide; and also exempted products viz., Rectified Spirit and Extra Neutral Alcohol. The appellant had initially discharged duty on the said molasses for the period September 2007 to April 2008. Later, they filed a refund claim of the duty paid pleading that molasses consumed captively, eligible for exemption under Notification No.67/95-CE dated 16.3.1995, since the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 54 or chapter 55 of the First Schedule to the said Act. (iii) Fabrics of cotton or man-made fibres falling under heading No.58.01, 58.02, 58.06 (other than goods falling under sub-heading No.5806.20), 60.01 or 60.02 (other than goods falling under sub-heading No.6002.10) of the First Schedule to the said Act. 9. The crux of the issue is that in the event the appellant complied with the condition of Clause (vi) of the said Notification by discharging the obligation prescribed in Rule 6 of CCR, 2001 then even if molasses are used in the manufacture of exempted products, they could claim exemption on molasses. The relevant conditions of Rule 6(3)(a)(i) reads as follows: "Rule 6. Obligation of a manufacturer or producer of final products and a provider of output services - (1) ............. (2) ............. (3) Notwithstanding anything contained in sub-rules (1) and (2), the manufacturer or provider of output service, opting not to maintain separate accounts, shall follow either of the following conditions, as applicable to him, namely: (a) if the exempted goods are - (i) goods falling within Heading No.22.04 of the First Schedule to the Excise Tariff Act (here ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ses is not completely used for the production of exempted/non-dutiable product because a part of Rectified Spirit is converted to Denatured Spirit, which is dutiable. Our attention was invited to amendment to Notification No. 67/95-C.E. by Notification No. 31/2001-C.E. dated 1-1-2001. In terms of the said amendment, the appellants are entitled for the benefit of exemption Notification in a situation where there is manufacture of both dutiable and exempted final products, provided the manufacturer discharges the obligation prescribed in Rule 57AD of the Central Excise Rules, 1944, which is pari materia with Rule 6 of the Cenvat Credit Rules, 2002. This is the point urged by the appellants. What is the obligation under Rule 6 of the Cenvat Credit Rules, 2002? The obligation under Rule 6 of Cenvat Credit Rules is that when a manufacturer uses input both for exempted and dutiable final products, he should maintain separate accounts because no Cenvat credit is available for the inputs used in exempted products. There is an option for the manufacturer not to maintain two separate accounts. Once he exercises the option, it is sufficient if he pays 10% of the sale price of the exempted pro ..... X X X X Extracts X X X X X X X X Extracts X X X X
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