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2019 (4) TMI 642 - AT - Central ExciseCENVAT credit - clearance of by-product - common inputs and input services used in manufacture of dutiable goods as well as exempted goods - non-maintenance of separate records - demand of 6% of the value of electricity sold to various companies - proviso to sub-rule (1) of Rule 6 of CENVAT Credit Rules, 2004 - Held that - The issue decided in the case of COMMISSIONER OF CENTRAL TAX AND CENTRAL EXCISE, BELGAUM VERSUS LAILA SUGARS PVT LIMITED 2019 (2) TMI 568 - CESTAT BANGALORE , where it was held that in case of removal of waste or by-product Rule 6(3) has no application. Appeal dismissed - decided against Revenue.
Issues: Appeal against order allowing CENVAT credit on common inputs for manufacturing dutiable and exempted goods without maintaining separate records or paying 6% of value of exempted goods.
Analysis: 1. Facts and Background: The appeal was filed by the Revenue against the order of the Commissioner (A) allowing the appeal of the respondent-assessee, who availed CENVAT credit on common inputs for manufacturing both dutiable and exempted goods without maintaining separate records or paying the required 6% of the value of exempted goods. A show-cause notice was issued demanding 6% of the amount of bagasse sold by the assessee along with interest and penalty. The Assistant Commissioner confirmed the demand, which was appealed by the respondent-assessee. 2. Legal Submissions: The Revenue contended that the impugned order was unsustainable as it did not consider the amendment to Rule 6 of the CENVAT Credit Rules, 2004, effective from 1.3.2015. The respondent-assessee, on the other hand, defended the order by citing decisions of the Hon'ble Supreme Court and the Tribunal in similar cases. 3. Judicial Analysis: The Tribunal, after hearing both parties and reviewing the records, found that the issue was settled in various decisions cited by the respondent-assessee. The Tribunal noted that the issue had been considered in the respondent's own case for a different period, where it was held that the demand for 6% of the value of electricity sold was not sustainable in law. The Tribunal relied on previous judgments and held that in the generation of electricity from bagasse, no other input or input service was used, making the electrical energy neither excisable nor exempted goods, thus Rule 6 was not applicable. 4. Decision: By following the precedents and ratios of the cited decisions, the Tribunal upheld the impugned order, dismissing the appeal of the Revenue. The demand for 6% of the value of electricity sold by the respondent was set aside. The operative portion of the order was pronounced in open court on 08/04/2019, affirming the decision in favor of the respondent-assessee.
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