2003 (9) TMI 268 - AT - Central Excise

Summary

Issues involved: Whether respondents have to deposit an amount equal to eight per cent of the price of bagasse cleared by them u/r 57CC of the Central Excise Rules, 1944.

Comprehensive Details:

1. Issue of Deposit Requirement u/r 57CC:
The appeal by the Revenue questioned whether the respondents were obligated to deposit eight per cent of the price of bagasse cleared by them u/r 57CC of the Central Excise Rules, 1944. The Assistant Commissioner had confirmed a demand based on the duty paid on inputs and the provisions of Rule 57CC. However, the Commissioner (Appeals) rejected the appeal filed by the Revenue, citing previous Tribunal decisions. The Revenue argued that the entire process of manufacturing sugar is integrated, and as bagasse is mentioned in the Central Excise Tariff Act, Rule 57CC should apply.

2. Arguments and Counterarguments:
The Revenue contended that the manufacture of sugar is a continuous process, and as bagasse is mentioned in the Tariff Act, Rule 57CC should be applicable. On the other hand, the respondents argued that bagasse is a by-product and not a final product for which inputs are used, thus Rule 57D should apply instead.

3. Decision and Rationale:
After considering the submissions, the Tribunal found that Rule 57CC applies when a manufacturer produces both dutiable and exempted or nil-rated final products. Bagasse, being a by-product of sugar manufacturing, does not qualify as a final product. The Tribunal referred to Rule 57D, which allows for credit of duty even if part of the inputs is contained in waste or by-products. As waste cannot be considered a final product, Rule 57CC was deemed inapplicable. Citing a previous case, the Tribunal upheld the impugned order and dismissed the Revenue's appeal.

This judgment clarifies the distinction between final products and by-products in the context of excise duty obligations, emphasizing the application of specific rules based on the nature of the goods produced.