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2019 (2) TMI 568 - AT - Central ExciseCENVAT Credit - clearance of by-product/waste - bagasse - common input, input services used in manufacture of dutiable goods as well as exempted goods - non-maintenance of separate records - Rule 6 of CCR, 2004 - Held that - The issue is no more res integra and has been settled by the decision in the case of INDRESHWAR SUGAR MILS LTD. AND ORS. VERSUS CCE, PUNE III 2017 (11) TMI 1766 - CESTAT MUMBAI , where it was held that in case of removal of waste or by-product Rule 6(3) has no application - demand set aside - appeal dismissed - decided against Revenue.
Issues:
- Interpretation of Rule 6(2) and Rule 6(3) of the CCR, 2004 regarding the treatment of bagasse as an exempted good. - Whether the respondent is liable to pay an amount equivalent to 6% of the value of bagasse and pressed mud cleared. - Application of precedents in similar cases to determine the outcome of the appeal. Interpretation of Rule 6(2) and Rule 6(3) of the CCR, 2004: The case involved the interpretation of Rule 6(2) and Rule 6(3) of the CCR, 2004 concerning the treatment of bagasse, a by-product of sugarcane juice extraction, as an exempted good. The appellant, engaged in sugar and molasses production, faced a demand for 6% of the amount of bagasse sold due to non-maintenance of separate records or payment as required by the rules. The Commissioner (A) had set aside the demand, leading to the Revenue's appeals. The Revenue argued that the impugned order did not consider the amended Rule 6 properly. The appellant contended that the order was rightly decided based on precedents and settled legal positions. The Tribunal analyzed whether bagasse qualified as an exempted good under Rule 6(2) and if the appellant was liable to pay 6% of its value under Rule 6(3). Liability to pay 6% of the value of bagasse: The issue of whether the appellant was obligated to pay 6% of the value of bagasse cleared was a central point of contention. The Revenue contended that the amended Rule 6 applied to non-excisable items like bagasse from March 2015, emphasizing the importance of the Explanation added to the rules. The appellant, supported by legal counsel, argued that the Commissioner (A) correctly relied on specific decisions to support their position. The Tribunal considered the settled legal position and previous cases to determine the liability of the appellant regarding the payment of the prescribed amount for the cleared bagasse and pressed mud. Application of precedents and legal decisions: The Tribunal examined the applicability of precedents and legal decisions in similar cases to resolve the appeal. The Revenue challenged the impugned order, citing the need to consider the amended Rule 6 and disregarding certain precedents. In contrast, the appellant defended the order by highlighting decisions like Shivarathna Udyog Ltd., Athani Sugars Ltd., and Indreshwar Sugars Ltd. to support their case. The Tribunal found that the issue at hand had been settled by previous decisions relied upon by the appellate authority, leading to the dismissal of the Revenue's appeals based on the established legal principles and precedents. This detailed analysis of the judgment highlights the key issues, arguments presented by both parties, and the Tribunal's decision based on the interpretation of relevant rules and precedents in the context of the case.
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