2019 (12) TMI 520 - AT - Central Excise

CENVAT Credit - By-product/exempt goods - Bagasse - non-maintenance of separate account for inputs and input services for manufacture of dutiable and exempted products - Rule 6(3) of CENVAT Credit Rules, 2004 - HELD THAT - The issue has already been settled by the Hon'ble High Court of Allahabad in Balrampur Chini Mills Ltd v. Union of India 2019 (5) TMI 972 - ALLAHABAD HIGH COURT wherein the Hon'ble High Court observed that provisions of Rule 6 of CENVAT Credit Rules, 2004 are not applicable to the facts of the case. The appellant is not liable to pay 6% of the value of bagasse cleared by them - appeal allowed - decided in favor of appellant.

Summary

Issues:
Challenge to demand of 6% of the value of bagasse under Rule 6(3) of CENVAT Credit Rules, 2004.

Analysis:
The appellant, engaged in sugar and molasses manufacture, sold bagasse without duty payment. Revenue argued for 6% value demand due to lack of separate account maintenance for dutiable and exempted products inputs/services. The appellant contested, citing a High Court judgment (Balrampur Chini Mills Ltd v. Union of India) where Rule 6 was deemed inapplicable to bagasse.

The Tribunal noted the settled High Court stance that Rule 6 doesn't cover bagasse. Quoting the High Court's view on the matter, the Tribunal ruled in favor of the appellant, negating the 6% value demand. Consequently, the impugned order was set aside, and the appeal allowed with consequential relief.