2012 (5) TMI 783 - AT - Central Excise

Summary

Issues involved: Interpretation of Rule 6(3)(b) of Cenvat Credit Rules regarding payment for press mud, marketability of press mud post-amendment to Section 2(d), applicability of Tribunal's decision on bagasse to press mud.

Issue 1 - Payment for Press Mud:
The issue revolved around whether the appellant was liable to pay 10% of the value of press mud, an exempted excisable product, as per Rule 6(3)(b) of Cenvat Credit Rules. The demand was confirmed against the appellant based on this provision.

Issue 2 - Marketability of Press Mud:
The question arose on the marketability of press mud following the amendment to Section 2(d). While press mud had been considered non-excisable in previous decisions, the Revenue argued that post-amendment, press mud should be deemed marketable and hence excisable due to being sold for a consideration by the appellants.

Issue 3 - Applicability of Tribunal's Decision on Bagasse:
Referring to a Tribunal's Division Bench decision on bagasse, it was argued that the same rationale should apply to press mud as both are waste products from sugar manufacture. The decision highlighted the impossibility of maintaining separate accounts for inputs used in the production of sugar/molasses and bagasse/press mud, leading to the setting aside of the impugned order and allowing the appeal.

In conclusion, the judgment favored the appellant by setting aside the demand for payment related to press mud and allowing the appeal based on the applicability of the Tribunal's decision on bagasse to press mud, emphasizing the waste nature of both products in the sugar manufacturing process.