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2017 (12) TMI 950 - AT - Central ExciseReversal of CENVAT credit - Pressmud, Bagasse and Compost, Boiler Ash etc. - Rule 6 of CCR - Held that - if any input is contained in waste by product or goods the cenvat credit shall not be denied - the Cenvat credit either by way of Rule 6(3) or otherwise cannot be denied. In case of removal of waste or by-product Rule 6(3) has no application - appeal allowed - decided in favor of appellant.
Issues Involved:
Reversal of cenvat credit under Rule 6 of the Cenvat Credit Rules for waste and by-products generated during the manufacturing process. Analysis: The appeals involved in this judgment dealt with the reversal of cenvat credit under Rule 6 of the Cenvat Credit Rules for waste and by-products generated during the manufacturing process. The appellants argued that the products in question, such as Pressmud, Bagasse, and Compost, are waste and refuse of the manufacturing process and should not require reversal of cenvat credit. They relied on a previous Tribunal decision that supported their stance. On the other hand, the Revenue argued that an explanation in Rule 6(1) made the provisions applicable even to non-excisable goods, attempting to distinguish a previous Supreme Court decision. The Tribunal referred to a previous order in a similar case where it was observed that waste and by-products like bagasse, press-mud, boiler ash, and compost do not require payment under Rule 6(3) of the Cenvat Credit Rules. The Tribunal cited judgments from the Bombay High Court and other cases to support the view that the reversal of credit does not apply to waste and by-products. Additionally, a CBEC Circular was referenced to emphasize that cenvat credit should not be denied for inputs contained in waste, refuse, or by-products. The Tribunal concluded that Rule 6(3) does not apply to waste or by-products, setting aside the impugned orders and allowing the appeals based on this interpretation. In summary, the judgment clarified that the reversal of cenvat credit under Rule 6 of the Cenvat Credit Rules does not apply to waste and by-products generated during the manufacturing process. The decision was based on previous rulings, including a Tribunal order and judgments from the Bombay High Court, supported by a CBEC Circular emphasizing the admissibility of cenvat credit for inputs in waste, refuse, or by-products. As a result, the impugned orders were set aside, and the appeals were allowed.
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