2015 (1) TMI 1183 - AT - Central Excise

Whether Rule 6 of the Cenvat Credit Rules 2004 would apply in respect of bagasse and press-mud generated during the course of manufacture of sugar and the assessee-manufacturer is required to reverse Cenvat credit on the inputs contained in the waste product generated or in the absence of maintenance of separate records whether payment @ 5%/6% of the value of exempted goods needs to be done? - Held that - Tribunal considered the very same matter in the case of Commissioner of Central Excise Pune-II v. DY Patil SSK Ltd. and of this Tribunal in the case of Indian Potash Ltd. v. Commissioner of Central Excise Allahabad - 2012 (12) TMI 347 - CESTAT NEW DELHI . Ratio of these decisions applies squarely to the facts of the present case. Accordingly we set aside the impugned order confirming the payment of a sum of 2, 01, 087/- under Rule 6 of the Cenvat Credit Rules 2004 and allow the appeal with consequential relief if any in accordance with law.- Decided in favour of assessee.

Summary

Issues:
Whether Rule 6 of the Cenvat Credit Rules, 2004 applies to bagasse and press-mud generated during sugar manufacture, requiring reversal of Cenvat credit or payment @ 5%/6% of exempted goods value.

Analysis:
The Appellate Tribunal CESTAT MUMBAI considered an application for early hearing filed by a party based on the issue covered by previous Tribunal and High Court decisions. The issue revolved around the applicability of Rule 6 of the Cenvat Credit Rules, 2004 to waste products like bagasse and press-mud generated during sugar manufacturing. The Tribunal noted that the issue had been addressed in previous decisions and whether the assessee-manufacturer needed to reverse Cenvat credit or make a payment @ 5%/6% of exempted goods value was the crux of the matter.

The Tribunal observed that the issue at hand had been previously addressed by both the Tribunal and various High Courts. The learned Additional Commissioner representing the Revenue acknowledged that the matter was already covered by existing decisions. Given the narrow scope of the issue, the Tribunal decided to proceed with the appeal for consideration and disposal.

In a previous case, the Tribunal had ruled that waste products like bagasse and compost fertilizer generated during sugar manufacturing did not qualify as final products. Therefore, the payment of a sum equal to 10%/5% of the goods' price under Rule 6(3) of the Cenvat Credit Rules, 2004 was deemed unnecessary. This decision was based on precedents from the Hon'ble High Court of Allahabad and previous Tribunal rulings. The Tribunal applied the ratio of these decisions to the current case, setting aside the order requiring a payment of Rs. 2,01,087 under Rule 6 of the Cenvat Credit Rules, 2004. The appeal was allowed with any consequential relief to be granted in accordance with the law, and the Miscellaneous Application was also disposed of.

In conclusion, the Tribunal's decision was based on the interpretation of Rule 6 of the Cenvat Credit Rules, 2004 in the context of waste products generated during sugar manufacturing, aligning with previous judicial interpretations and rulings.