2016 (4) TMI 1298 - AT - Central Excise

CENVAT credit - manufacturer of sugar and molasses as well as exempted Bagasse - non-maintenance of separate records - reversal of 10% of the price of the exempted final products - Held that - he issue of reversal of Cenvat on bagasse have been decided in favor of assessee by the Apex Court in U.O. India v. DSCL Sugar Ltd. 2015 (10) TMI 566 - SUPREME COURT where it was held that it is not in dispute that Bagasse is only an agricultural waste and residue which itself is not the result of any process. Therefore it cannot be treated as falling within the definition of Section 2(f) of the Act and the absence of manufacture there cannot be any excise duty. Since it is not a manufacture obviously Rule 6 of the Cenvat Rules 2004 shall have no application - the Appeal is allowed subject to payment of cost of 10, 000/- to be paid in Prime Minister s National Relief Fund .

Summary

Issues:
1. Appeal against Order-in-Appeal No. 193/CE/LKO/2014
2. Use of common inputs in manufacturing dutiable and exempted final products
3. Demand of recovery under Rule 14 of Cenvat Credit Rules, 2004
4. Imposition of penalty under Rule 15 of Cenvat Credit Rules, 2004
5. Appeal dismissal due to delay in filing

Analysis:
1. The appellant, a sugar and molasses manufacturer, appealed against Order-in-Appeal No. 193/CE/LKO/2014, which required payment due to the use of common inputs in manufacturing both dutiable and exempted final products.

2. The appellant did not maintain separate accounts for inputs used in manufacturing exempted products, leading to a demand for recovery under Rule 14 of Cenvat Credit Rules, 2004. A show cause notice was issued, demanding payment and imposing interest and penalty.

3. The Assistant Commissioner confirmed the demand under Section 11A(1) of Central Excise Act, 1944, along with interest and penalty. The appellant's appeal to the Commissioner (Appeals) was dismissed due to filing beyond the statutory period without providing reasons for the delay.

4. The Tribunal considered the issue of reversal of Cenvat on bagasse, citing a favorable decision by the Apex Court in a previous case. The Tribunal allowed the appeal, subject to the appellant paying a cost of &8377; 10,000 to the 'Prime Minister's National Relief Fund' by a specified date.

5. The judgment was pronounced in open court, granting relief to the appellant based on the legal precedent cited regarding the treatment of bagasse in Cenvat matters.