2022 (7) TMI 8 - AT - Central Excise

CENVAT Credit - exempted product/by-product - Bagasse generated during the course of manufacture of Sugar - Rule 6 of Cenvat Credit Rules - HELD THAT - The issue is no longer res-integra in the light of the Hon ble Supreme Court judgment in the case of UNION OF INDIA VERSUS DSCL SUGAR LTD. 2015 (10) TMI 566 - SUPREME COURT where it was held that In the present case it could not be pointed out as to whether any process in respect of Bagasse has been specified either in the Section or in the Chapter notice. In the absence thereof this deeming provision cannot be attracted. Otherwise, it is not in dispute that Bagasse is only an agricultural waste and residue, which itself is not the result of any process. Therefore, it cannot be treated as falling within the definition of Section 2(f) of the Act and the absence of manufacture, there cannot be any excise duty. Even after the period of amendment under section 2(f) also the Allahabad high court in the case of M/S BALRAMPUR CHINI MILLS LTD. THROUGH ITS GENERAL MANAGER VERSUS UNION OF INDIA, MINISTRY OF FINANCE DEPARTMENT OF REVENUE 2019 (5) TMI 972 - ALLAHABAD HIGH COURT has stuck down the circular dated 25.04.2016 and it was held that in the case of generation of Bagasse in the manufacture of sugar and clearance thereof Rule 6 of Cenvat Credit Rules, 2004 has no application. Appeal allowed - decided in favor of appellant.

Summary

Issues involved: Whether the appellant is required to pay an amount under Rule 6 of Cenvat Credit Rules on the clearance of "Bagasse" generated during the course of manufacture of Sugar.

Analysis:

The judgment by the Appellate Tribunal CESTAT AHMEDABAD, delivered by Mr. Ramesh Nair, Member (Judicial), revolves around the issue of whether the appellant is obligated to pay an amount under Rule 6 of Cenvat Credit Rules concerning the clearance of "Bagasse" produced during the manufacturing process of sugar. In the absence of representation from the appellant, the Tribunal proceeded with the case. The Learned Superintendent (Authorized Representative) for the Respondent reiterated the findings of the impugned order during the hearing.

Upon careful consideration of the submissions and perusal of records, the Tribunal referred to the legal precedents, notably the Hon'ble Supreme Court judgment in the case of UOI and Ors vs. M/s DSCL Sugar Ltd 2015-TIOL-240-SC-CX. Additionally, the Tribunal highlighted the judgment of the Allahabad High Court in the case of M/s Balrampur Chini Mills Ltd -2019 (5) TMI 972, which invalidated a circular dated 25.04.2016. Based on these legal positions, it was established that Rule 6 of Cenvat Credit Rules, 2004 does not apply to the generation and clearance of Bagasse in the sugar manufacturing process.

Consequently, the Tribunal concluded that the demand made in the present case was not sustainable in light of the settled legal position established by the aforementioned judgments. Therefore, the impugned order was set aside, and the appeal was allowed. The judgment was dictated and pronounced in the open court, bringing closure to the matter.