2013 (11) TMI 1165 - AT - Central Excise

Press mud emerged as by product - Cenvat credit as per Rule 6(2) OF CENVAT Credit Rules - Wavier of pre-deposit Held that - Following INDIAN POTASH LTD. Versus COMMISSIONER OF CENTRAL EXCISE, ALLAHABAD 2012 (12) TMI 347 - CESTAT, NEW DELHI - The Bagasse is exemptable - The same anology will apply in the case of the Press Mud which arises during the course of manufacturing of sugar - The Applicant could able to make out a prima facie case for total waiver - Pre-deposit of all dues waived and its recovery stayed during pendency of the Appeal - Stay granted.

Summary

Issues:
1. Confirmation of demand for 10% of the value of goods cleared due to consumption of duty paid inputs for manufacturing exempted and dutiable products.

Analysis:
The judgment by Mr. M.V. Ravindran of the Appellate Tribunal CESTAT Ahmedabad dealt with a Stay Petition where the appellant did not appear, leading to the issue being considered in their absence. The lower authorities had confirmed a demand for 10% of the value of goods cleared by the appellant, citing consumption of duty paid inputs for manufacturing both exempted and dutiable products. The authorities classified Press Mud and Bagasse arising during sugar manufacturing as exempted products, thus requiring the appellant to pay the amount for not following Rule 6(2) of the CENVAT Credit Rules, 2004. Referring to a precedent involving Indian Potash Limited, the Tribunal held Bagasse as exemptable, extending the same reasoning to Press Mud in this case. Consequently, the appellant's request for waiver of pre-deposit was granted, and recovery stayed pending appeal disposal.

This judgment underscores the importance of adherence to CENVAT Credit Rules and the treatment of inputs used in manufacturing exempted and dutiable products. It establishes a precedent for considering certain by-products, like Bagasse and Press Mud, as exempted products, impacting the calculation of duty payments. The decision showcases the Tribunal's discretion in granting waivers based on case-specific circumstances, emphasizing the need for parties to actively participate in proceedings to present their case effectively.