2005 (4) TMI 129 - AT - Central Excise

Summary

Issues: Revenue's application for condoning delay, eligibility of credit for bagasse baling machine.

Condoning Delay:
The Revenue filed an application for condoning a one-day delay in filing the appeal, which was allowed by the Tribunal based on the reasons provided in the application. This allowed the appeal to proceed for hearing despite the delay.

Eligibility of Credit for Bagasse Baling Machine:
The main issue in the appeal was the challenge by the Revenue against the order allowing credit for a bagasse baling machine. The Revenue argued that since the machine is used for pressing bagasse, which is exempt from duty, the respondents should not be entitled to credit for the machine. However, the respondents relied on a previous decision by the Tribunal in a similar case where credit was allowed for the same type of machine used in the sugar manufacturing process.

The Tribunal, referring to the previous decision, highlighted that the bagasse baling press is used not only for baling bagasse but also for producing goods in the manufacturing process of sugar. The Tribunal clarified that the bar on credit under Rule 57R(1) would only apply if the capital goods were used exclusively for producing a final product exempt from duty. Since the machine was used for both baling bagasse and in the sugar manufacturing process, it was considered eligible for credit as capital goods.

The Revenue attempted to distinguish the present case by pointing out that some portion of the bagasse was cleared by the respondent, unlike the captively consumed bagasse in the previous case. However, the Tribunal found that as the respondents used the bagasse baling press in their factory for generating electricity and manufacturing sugar, which are part of their final product, the impugned order allowing credit was upheld, and the appeals were dismissed.

In conclusion, the Tribunal dismissed the Revenue's appeal, upholding the decision to allow credit for the bagasse baling machine based on its dual usage in the manufacturing process of sugar.