2014 (4) TMI 52 - AT - Central Excise

Demand in respect of press mud bagasse and compost fertilizer cleared without payment of duty by the sugar manufacturers - Availment of credit on common inputs which are used in the manufacture of excisable as well goods cleared at nil rate of duty in view of Rule 6(3) of the Cenvat Credit Rules 2004 - Held that - Commissioner (Appeals) in the impugned order relied upon the earlier decisions of the Tribunal on the same issue. The tribunal in the case of Indian Potash Ltd vs CCE Allahabad 2012 (12) TMI 347 - CESTAT NEW DELHI set aside the demand in respect of bagasse on the ground that bagasse is nothing but waste obtained at the time of manufacture of sugar - Decided against Revenue.

Summary

Issues:
1. Appeal against dropping of demand for press mud, bagasse, and compost fertilizer cleared without payment of duty by sugar manufacturers.

Analysis:
The Revenue filed appeals against an order by the Commissioner (Appeals) dropping the demand for press mud, bagasse, and compost fertilizer cleared without duty payment by sugar manufacturers. The Revenue issued Show Cause Notices demanding amounts equal to a percentage of the goods' price cleared without duty, alleging that the manufacturers were availing credit on common inputs used in manufacturing goods cleared at nil duty rate under Rule 6(3) of the Cenvat Credit Rules, 2004.

The Commissioner (Appeals) relied on previous Tribunal decisions in the impugned order. The Tribunal, in the case of Indian Potash Ltd vs CCE, Allahabad, and Eco Cane Sugar Energy Ltd, set aside demands for bagasse and press mud, respectively, based on the nature of these materials as waste obtained during sugar manufacturing. The Tribunal's decisions were supported by the Hon'ble Allahabad High Court's ruling in related cases.

Based on the precedents and the nature of the materials in question, the Tribunal found no error in the Commissioner (Appeals)'s order. Consequently, the appeals filed by the Revenue were dismissed.