2019 (5) TMI 1653 - AT - Central Excise

CENVAT credit - inputs/input services used in the manufacture of excisable as well as exempted goods including non-excisable goods - Bagasse and Press Mud - period from 1st March 2015 to 31st March 2016 - sub-rule (1) of Rule 6 of Cenvat Credit Rules, 2004 - HELD THAT - The issue is covered by precedent decision in respondent s own case M/S BAJAJ HINDUSTHAN SUGAR LIMITED VERSUS COMMISSIONER, CENTRAL EXCISE CGST, (NOIDA, U.P.) 2019 (6) TMI 186 - CESTAT ALLAHABAD where it was held that Press Mud and Bagasse are not arising out of manufacturing activity and the same are agricultural waste and residue and therefore the said Final Order is applicable in the present case. Credit need not be reversed - appeal dismissed - decided against Revenue.

Summary

Issues:
Delay in filing the appeal before the Tribunal. Interpretation of Rule 6 of Cenvat Credit Rules, 2004 regarding payment obligations for non-excisable goods. Application of precedent decision in a similar case.

Delay in filing the appeal:
The Tribunal considered the application for condonation of delay in filing the appeal. The learned Dy.Commr. (A.R.) for the Revenue explained that the delay of six days was due to the reviewing authorities holding additional charge. The Tribunal, considering the reason provided and deeming the delay to be on the lower side, condoned the delay. Subsequently, as the respondent was absent, the appeal was taken up for final disposal.

Interpretation of Rule 6 of Cenvat Credit Rules, 2004:
The case involved manufacturers of sugar and molasses who were removing Bagasse and Press Mud during the period from 1st March 2015 to 31st March 2016. The issue revolved around the amendment in the explanation under sub-rule (1) of Rule 6 of Cenvat Credit Rules, 2004 effective from 01.03.2015. This amendment imposed an obligation on manufacturers to pay a fixed percentage of the value of non-excisable goods removed when Cenvat Credit on inputs and input services were availed for manufacturing excisable as well as exempted goods, including non-excisable goods. Proceedings were initiated against the respondent for recovery of approximately &8377; 44.00 Lakhs based on this rule. However, the Tribunal noted that a precedent decision in the respondent's own case through Final Order No.70801/2019 dated 18.04.2019 had established that Press Mud and Bagasse did not arise from manufacturing activity but were agricultural waste and residue. Therefore, as this Final Order was deemed applicable in the present case, the Tribunal upheld the impugned order and rejected the appeal filed by the Revenue.

Application of precedent decision:
The Tribunal relied on a precedent decision in the respondent's own case to determine the status of Bagasse and Press Mud as agricultural waste and residue, not arising from manufacturing activity. The Final Order from a previous case had established this interpretation, which was deemed applicable to the current situation. Consequently, based on the precedent decision, the Tribunal upheld the impugned order and dismissed the appeal filed by the Revenue.

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