2015 (7) TMI 625 - AT - Central Excise

Cenvat Credit - Demand of 5%/10% value of exempted goods - Non maintenance of separate accounts - whether the appellant is liable to pay amount 5%/10% of the value of Bagasse, Press mud and Fly Ash cleared by them as waste - Held that - Final order of this Bench in appellant s own case vide order (2014 (2) TMI 1180 - CESTAT MUMBAI) has held that press mud is waste and non-excisable. This view of the Tribunal is binding on me and accordingly if the appellant has paid an amount under protest entertaining a view that he is not liable to pay the same it needs to be refunded to him. I also find strong force in contentions raised by the appellant that decision of Hon ble High Court of Allahabad in the case of Balampur Chini Mills (2013 (1) TMI 525 - ALLAHABAD HIGH COURT) squarely covers the issuee in their favour. The waste cannot be considered as a bye-product and hence it cannot be said that common inputs on input services are utilized for seeking reversal of 5% or 10% of the value of waste products. Accordingly, in my view, the impugned order is liable to be set aside - Decided in favour of assessee.

Summary

Issues:
- Liability to pay 5%/10% amount on cleared waste products
- Refund claim based on non-excisability of waste products

Analysis:
1. Liability to pay 5%/10% amount on cleared waste products: The appellant, a sugar manufacturer, cleared Bagasse, Press mud, and Fly Ash without duty payment, claiming them to be non-excisable. The revenue contended that as separate accounts were not maintained for common goods and input services, the appellant must pay 5%/10% of the value of the exempted goods cleared. The appellant paid under protest and sought a refund, citing favorable decisions in similar cases. The adjudicating authority and the first appellate authority rejected the refund claim. However, the Tribunal noted that in a previous case, it held that press mud is waste and non-excisable. Citing this precedent and the decision of the Allahabad High Court, waste products like Bagasse and Press Mud were considered non-excisable, leading to the conclusion that the appellant was not liable to pay the disputed amount.

2. Refund claim based on non-excisability of waste products: The appellant argued that previous decisions supported their claim that waste products like Press Mud were non-excisable. The revenue, however, referred to a case where waste and scrap were deemed excisable as per the Central Excise Tariff. After considering both arguments and examining the records, the Tribunal upheld the appellant's position, emphasizing that waste cannot be treated as a by-product and, therefore, the appellant was entitled to a refund of the amount paid under protest. The Tribunal set aside the impugned order and allowed the appeals with consequential relief, ruling in favor of the appellant.

In conclusion, the Tribunal found in favor of the appellant, holding that waste products like Bagasse, Press mud, and Fly Ash were non-excisable, and the appellant was entitled to a refund of the amount paid under protest. The decision was based on precedents and legal interpretations that supported the appellant's position, leading to the setting aside of the impugned order and allowing the appeals with consequential relief.