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2024 (5) TMI 1191 - AT - Central ExciseRecovery of CENVAT Credit - Applicability of Rule 6 of the CENVAT Credit Rules, 2004 to Bagasse and Press Mud - period December , 2016 to June, 2017 - HELD THAT - The Hon ble Supreme Court in the case of UNION OF INDIA VERSUS DSCL SUGAR LTD. 2015 (10) TMI 566 - SUPREME COURT has 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. There are no merits in this appeal filed by the revenue - appeal dismissed.
Issues Involved:
1. Applicability of Rule 6 of the CENVAT Credit Rules, 2004 to Bagasse and Press Mud. 2. Validity of the Circular No. 1027/15/2016-CX dated 25.04.2016. 3. Relevance of the Supreme Court judgment in DSCL Sugars and Allahabad High Court judgment in Balrampur Chini Mills. Summary: Issue 1: Applicability of Rule 6 of the CENVAT Credit Rules, 2004 to Bagasse and Press Mud The revenue issued show cause notices to the respondent for the demand and recovery of amounts payable u/r 6 of the CENVAT Credit Rules, 2004, for the clearances/sale of Bagasse and Press Mud for the period December 2016 to June 2017. The respondent did not maintain separate records/accounts for inputs and input services used in the manufacture of exempted goods, namely Bagasse and Press Mud, and did not pay the required amount or reverse proportionate credit as per Rule 6(3). Issue 2: Validity of the Circular No. 1027/15/2016-CX dated 25.04.2016 The revenue argued that the Commissioner (Appeals) erred by not considering the amendment in Rule 6 of the CENVAT Credit Rules, 2004, effective from 01.03.2015, which included non-excisable goods cleared for consideration as exempted goods. The Circular No. 1027/15/2016-CX clarified that Bagasse, being a non-excisable good cleared for consideration, should be treated like exempted goods for the purpose of reversal of credit. Issue 3: Relevance of the Supreme Court judgment in DSCL Sugars and Allahabad High Court judgment in Balrampur Chini Mills The Commissioner (Appeals) relied on the Supreme Court judgment in DSCL Sugars [2015(322)ELT769 (SC)], which held that Bagasse is an agricultural waste and not a manufactured product, thus Rule 6 of the CENVAT Credit Rules, 2004, does not apply. The Allahabad High Court in Balrampur Chini Mills [2019(368)ELT 276 (All)] also quashed the Circular dated 25.04.2016, stating that Bagasse is not a manufactured product and Rule 6 does not apply. Judgment: The Tribunal upheld the findings of the Commissioner (Appeals), stating that the issue is covered by the Supreme Court judgment in DSCL Sugars and the Allahabad High Court judgment in Balrampur Chini Mills. The Tribunal noted that the Circular dated 25.04.2016, which was the basis of the revenue's appeal, had been quashed by the jurisdictional High Court. The Tribunal found no merit in the revenue's appeal and dismissed it, along with the stay applications.
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