2012 (12) TMI 885 - AT - Central Excise

Duty on bagasse & press-mud - manufacture of sugar and molasses in a sugar factory - seeking waiver of pre-deposit along with interest and penalty - Held that - As decided in Indian Potash Ltd. vs. Commissioner of Central Excise, Allahabad 2012 (12) TMI 347 - CESTAT, NEW DELHI & COMMR. OF C. EX., PONDICHERRY Versus CHEYYAR CO-OP. SUGAR MILLS LTD. 2008 (6) TMI 533 - CESTAT, CHENNAI bagasse and press-mud are waste products and no amount under Rule 6 of the CENVAT Credit Rules can be demanded from the assessee against the exempted clearances made by them - there is no possibility of any input/chemicals having been used at that stage - pre-deposit is waived and stay granted.

Summary

Issues:
1. Application for waiver of pre-deposit and stay of recovery of duty.
2. Dutiability and excisability of bagasse and press-mud in a sugar factory.

Analysis:
1. The applicant sought waiver of pre-deposit and stay of recovery of duty amounting to Rs 27,851/- along with interest and penalty, confirmed by lower authorities.
2. The main issue revolved around the dutiability and excisability of bagasse and press-mud during the sugar and molasses manufacturing process. The department calculated 5% of the sale price of exempted goods cleared by the applicant under Rule 6 of the CENVAT Credit Rules, 2004.

3. The advocate for the applicant referenced judgments from the Delhi and Chennai Benches of the Tribunal to support their case. In the Indian Potash Ltd. case, it was held that bagasse emerges at the sugar cane crushing stage without any input or chemicals, leading to duty waiver. Similarly, in the Kisan Sahakari Chinni Mills Ltd. case, press-mud was deemed a waste product, not subject to duty under Rule 6. The Chennai Bench in the Cheyyar Co-op Sugar Mills Ltd. case also ruled pressmud as non-excisable, allowing the appeal.
4. The Deputy Commissioner representing the Revenue reiterated the lower authorities' findings.
5. The Tribunal noted that previous decisions by the Delhi and Chennai Benches established bagasse and press-mud as waste products, exempt from duty under Rule 6 of the CENVAT Credit Rules. Consequently, the Tribunal waived the pre-deposit and granted a stay on recovery pending appeal resolution.
6. The Tribunal allowed the stay petition, providing relief to the applicant.