2014 (4) TMI 1220 - AT - Central Excise

Waste - Whether the appellant is liable to pay 10% of the value of the bagasse emerged as a waste product during the manufacture of molasses and sugar? Held that - Inasmuch as bagasse is an inevitable waste arising during the course of manufacture and cannot be held to be a final marketable excisable product there is no requirement of payment of 10% amount in terms of the provisions of Rule 6(3)(1). The Board s Circular No. 904/24/2009-CX, dated 28-10-2009, stands struck down by Allahabad High Court in the case of Balrampur Chini Mills v. Union of India 2013 (1) TMI 525 - ALLAHABAD HIGH COURT , it stands held that the bagasse does not attract the provision of Rule 6(3)(1) of Cenvat Credit Rules. Appeal allowed - decided in favor of appellant.

Summary

The appeal involved liability to pay 10% of the value of bagasse waste during molasses and sugar manufacture due to not maintaining a separate Cenvat account. Tribunal ruled in favor of the appellant, citing bagasse as unavoidable waste not subject to Rule 6(3)(1) payment requirement. Board's Circular was invalidated by Allahabad High Court in a similar case. Impugned order was set aside, and appeal was allowed with relief to the appellant.