9911796707
|
Home
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2019 (5) TMI 322 - AT - Central ExciseCENVAT Credit - common inputs used in manufacture of dutiable as well as exempt goods (by-products) - press mud and spent wash - Rule 6(3) of CENVAT Credit Rules, 2004 - HELD THAT - Tribunal in MANAKPUR CHINI MILLS VERSUS CCE., ALLAHABAD 2012 (7) TMI 474 - CESTAT, NEW DELHI case in similar circumstances after analyzing the amendment to Section 2(d) of Central Excise Act, 1944 has held that the demand is not sustainable. In the present case organic manure emerges by physical mixing out of two byproducts viz. press mud and spent wash, hence, the aforesaid judgment is squarely applicable to the facts of the present case. Appeal allowed - decided in favor of appellant.
Issues:
- Interpretation of Rule 6(3) of CENVAT Credit Rules, 2004 regarding the emergence of organic manure from waste by-products. - Applicability of judgments by Hon'ble Allahabad High Court and Hon'ble Bombay High Court in similar circumstances. - Defectiveness of show cause notices in indicating input and input services used in the generation of by-products. - Analysis of the judgment by the Hon'ble Supreme Court in Union of India v. DSCL Sugar Ltd regarding the classification of agricultural waste. Interpretation of Rule 6(3) of CENVAT Credit Rules, 2004: The case involved an appeal against a show cause notice issued for non-compliance with Rule 6(3) of CENVAT Credit Rules, 2004. The appellant, engaged in manufacturing various excisable goods, argued that the emergence of organic manure from waste by-products did not result from a manufacturing process, hence no duty was payable. The appellant cited a judgment by the Hon'ble Allahabad High Court and the Tribunal in a similar case to support their contention. The Tribunal, after analyzing relevant amendments and judgments, found merit in the appeal and set aside the impugned orders, allowing the appeal with consequential relief. Applicability of Judgments by Hon'ble Allahabad High Court and Hon'ble Bombay High Court: The Tribunal referred to a judgment by the Hon'ble Bombay High Court in Rallis India Ltd v. Union of India to support its decision. The judgment highlighted that no excise duty is payable on waste products, and the credit of duty paid on inputs used in manufacturing waste products need not be reversed. The Tribunal found that the show cause notices in the present case were defective for not specifying the inputs used in generating by-products. Relying on the judgments and the defective notices, the Tribunal set aside the impugned orders and allowed the appeals. Defectiveness of Show Cause Notices: The Tribunal noted that the show cause notices in the case were defective as they failed to indicate the inputs and input services used in the generation of press mud converted into bio-compost. Citing the judgment of the Hon'ble Bombay High Court, the Tribunal found merit in the appeals and held that the impugned orders were not sustainable. Consequently, the Tribunal set aside the impugned orders and allowed the appeals. Analysis of Judgment by the Hon'ble Supreme Court in Union of India v. DSCL Sugar Ltd: The Tribunal also referred to a judgment by the Hon'ble Supreme Court in Union of India v. DSCL Sugar Ltd, which discussed the classification of agricultural waste. The judgment emphasized that agricultural waste, such as bagasse, not resulting from any process, cannot be treated as falling within the definition of 'manufacture' under the Central Excise Act. Applying this analysis to the present case where organic manure emerged from physical mixing of by-products, the Tribunal set aside the impugned order and allowed the appeal with consequential relief. This detailed analysis of the judgment showcases the Tribunal's thorough consideration of relevant legal provisions, precedents, and defects in the show cause notices to arrive at a decision favorable to the appellant.
|
