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2019 (7) TMI 1809 - AT - Central ExciseCENVAT Credit - inputs and input services for dutiable and exempted goods - Baggase being an exempted goods - non-maintenance of separate records - HELD THAT - The issue is settled in view of the decision of Hon'ble High Court of Bombay in the case of HINDALCO INDUSTRIES LIMITED VERSUS THE UNION OF INDIA, CUSTOMS, EXCISE AND SERVICE TAX APPELLATE TRIBUNAL, THE COMMISSIONER OF CENTRAL EXCISE 2014 (12) TMI 657 - BOMBAY HIGH COURT and the decision of Hon'ble Supreme Court in Union of India Vs. DSCL Sugar Ltd. 2015 (10) TMI 566 - SUPREME COURT where it was held that The credit is allowed - appeal allowed.
Issues:
1. Refund claim rejection based on the classification of Bagasse as an exempted product. 2. Interpretation of Rule 6(3) of Cenvat Credit Rules, 2004 regarding the duty on Bagasse. 3. Applicability of previous judgments on similar cases. 4. Consideration of High Court and Supreme Court decisions on the classification of Bagasse. Issue 1: Refund claim rejection based on Bagasse classification The appellant, engaged in sugar and molasses manufacturing, faced a demand for depositing 5% of Baggase sale value under Rule 6(3) of Cenvat Credit Rules, 2004. The refund claim was rejected citing a judgment of the Hon'ble Allahabad High Court, which held that Bagasse is not a manufactured product, thus Rule 6(3) does not apply. The Adjudicating Authority expressed uncertainty about the finality of the judgment and noted the pending appeals on similar cases. The Lower Appellate Authority upheld the rejection, leading to the appeal before the Tribunal. Issue 2: Interpretation of Rule 6(3) regarding Bagasse duty The Tribunal found the case aligned with previous decisions and cited the Hon'ble High Court of Bombay and the Supreme Court's ruling in Union of India Vs. DSCL Sugar Ltd. The Supreme Court clarified that Bagasse, as a residue of sugarcane, falls under a different classification with nil duty rate. Despite show cause notices demanding duty, the High Court of Allahabad and the Supreme Court held that Bagasse, being waste and not a manufactured product, is not subject to duty. Issue 3: Applicability of previous judgments The Tribunal considered the decisions in M/s. Balrampur Chini Mills Ltd. and the appeals filed by the Department against similar cases. The Lower Appellate Authority's alignment with previous orders indicated a consistent approach in handling such matters. The Tribunal's decision to allow the appeal with consequential benefits was based on the precedents set by the Hon'ble Supreme Court and High Courts in related cases. Issue 4: High Court and Supreme Court decisions on Bagasse classification The Tribunal highlighted the significance of the High Court's ruling on Bagasse classification as waste and not a manufactured product, leading to the exemption from duty. The Supreme Court's interpretation of excisable goods and amendments in relevant sections further supported the non-levy of duty on Bagasse. The Tribunal's decision to allow the appeal was in line with the established legal principles and interpretations provided by the higher courts. In conclusion, the Tribunal's judgment favored the appellant based on the classification of Bagasse as waste and not subject to duty, as established by previous judicial decisions and legal interpretations.
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