2007 (8) TMI 148 - AT - Central Excise

Cenvat/Modvat Appellant filed appeal against the demand under Rule 6(3)(b) of the CCR,2002 on enrich press mud and vermin compost are prepared from the waste product pressmud No demand sustained under Rule 6(3)(b) of CCR/2004

Summary

Issues: Application for waiver of pre-deposit and stay of recovery of demand under Rule 6(3)(b) of Cenvat Credit Rules, 2002.

The judgment pertains to an application for waiver of pre-deposit and stay of recovery of demand amounting to Rs. 1,56,180, related to the sale of Enriched Press Mud and Vermi Compost by a sugar mill. The demand was based on Rule 6(3)(b) of the Cenvat Credit Rules, 2002, which considers the enriched press mud and vermi compost as exempted final products emerging in the process of manufacturing dutiable final products like sugar and molasses. The appellants argued that press mud, from which the enriched products were made, is a waste product obtained during the manufacturing process of sugar and molasses, and hence, no demand should be imposed under Rule 6(3)(b) of the CCR, 2002. The appellants relied on previous Tribunal decisions to support their case, emphasizing that press mud being a waste product does not qualify as a final product under the said rule. The Tribunal agreed with the appellants' contention, stating that for Rule 6(3)(b) to apply, the goods involved must be final products manufactured using common inputs. As press mud is a waste product, no demand can be imposed on the biofertilizers prepared from it under Rule 6(3)(b) of the CCR, 2002. Consequently, the Tribunal set aside the impugned order and allowed the appeal filed by the appellants, highlighting that the demand was not sustainable based on the facts of the case.