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2018 (3) TMI 918 - AT - Central ExciseCENVAT credit - input services - Revenue entertained a view that input services were going into the manufacture of dutiable products i.e. Sugar & Molasses and exempted product Bagasse - Held that - the issue involved in both the present appeals is covered by the ruling of Hon ble Supreme Court of India in the case of Union of India Versus DSCL Sugar Ltd. 2015 (10) TMI 566 - SUPREME COURT wherein it has been held that the Bagasse is an agriculture waste and residue Bagasse is not generated as a result of any process of manufacture - Bagasse is not excisable goods - appeal allowed - decided in favor of appellant.
Issues:
- Interpretation of Cenvat Credit Rules regarding recovery of amount on Bagasse - Applicability of ruling by Hon’ble Supreme Court on Bagasse as a non-manufactured product Analysis: The case involved two appeals filed by the same appellants for different periods, concerning the manufacture of Sugar, Molasses, and Bagasse. The Revenue contended that input services used in manufacturing Sugar and Molasses were also going into the production of Bagasse, an exempted product. Consequently, a recovery of amounts under Rule 6(3) of Cenvat Credit Rules was proposed. The core issue was whether Bagasse should be included in the dutiable products. The appellant argued that the Hon’ble Supreme Court's ruling in the case of Union of India Versus DSCL Sugar Ltd. established that Bagasse is not a manufactured product, making the Revenue's recovery claim invalid. During the proceedings, the appellant cited the aforementioned ruling by the Hon’ble Supreme Court, emphasizing that Bagasse is classified as agricultural waste and residue, not resulting from any manufacturing process and not considered excisable goods. After considering the arguments from both sides and examining the facts, the Member (Technical) concluded that the issue in both appeals aligns with the Supreme Court's ruling on Bagasse. Consequently, the impugned orders were set aside, and both appeals were allowed. The appellants were granted consequential relief as per the law.
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