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TMI Blog2010 (5) TMI 743X X X X Extracts X X X X X X X X Extracts X X X X ..... avail Cenvat credit of duty on the cenvatable inputs. In course of manufacture of biscuits, waste in form of floor sweeping consisting of flour, dirty dough, etc. is generated which is returned to M/s. BIL without payment of duty. The Department was of the view that since the waste generated is an exempt product, in accordance with the provisions of Rule 6 (3) read with Rule 6 (2) of the Cenvat Credit Rules, 2001/2002/Rule 57AD (2) of Central Excise Rules, 1944, the respondent would be liable to pay an amount equal to 8% of the clearance value of such waste, as the respondent had not maintained separate account and inventory of cenvatable inputs used in the manufacture of dutiable finished products and those used in the manufacture of exem ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d since the respondent have not maintained separate account and inventory of the Cenvatabie inputs meant for dutiable and exempted finished products, the provisions of Rule 6(3) of Cenvat Credit Rules, 2001/2002/Rule 57AD (2) of Central Excise Rules, 1944 would be applicable. 2.2 Shri R. Krishnan, Advocate, the learned Counsel for the respondent pleaded that the waste generated is floor sweeping of flour, dirty dough, etc. that it is non-excisable, that Tribunal in the case of CCE, Bhopal v. J.B. Mangharam Food Ltd. reported in 2000 (115) E.L.T. 683 (Tribunal) has held that floor sweeping consisting of flour, maida, sugar, salt, dough and over-baked or under-baked biscuits arising in course of manufacture of biscuits being rubbish or scum ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ty. In course of manufacture of biscuits, waste in form of flour sweeping, consisting of flour, dirty dough, etc. arises which is also collected and returned to M/s. BIL. The point of dispute is as to whether in respect of the waste, the respondent are liable to pay an amount equal to 8% of the clearance value, as admittedly they are not maintaining separate account and inventory as per the provisions of sub-Rule (2) of Rule 6 of the Cenvat Credit Rules, 2001/2002/Rule 57AD (2) of Central Excise Rules, 1944. 4. Sub-rule (2) of Rule 6 of the Cenvat Credit Rules, 2001/2002 and sub-Rule (2) of Rule 57AD of the Central Excise Rules, 1944 during the period of dispute provided that where a manufacturer avails of Cenvat credit in respect of inpu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... are covered by the definition of exempted goods . However, on the question as to whether the floor sweeping arising in course of manufacture of biscuits are classifiable under heading 23.01 or are non-excisable, has been decided by the Tribunal in the case of CCE, Bhopal v. J.B. Mangharam Food Ltd. (supra), wherein the Tribunal held that such floor sweeping being merely rubbish or scum to keep the floor clean are not a residue from food industry and hence have to be treated as non-excisable. Since the product, in question, has been held by the Tribunal to be non-excisable, the same would not be covered by the definition of exempted goods and hence the provisions of sub-rule (3) of Rule 6 of Cenvat Credit Rules, 2001/2002 and sub-rule (2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ll have to pay, at the time of clearance of exempted goods, an amount as specified in this sub-rule. 5.1 If a manufacturer is manufacturing product group A which is dutiable and product group B which is exempted goods , he can comply with the provisions of sub-rule (2) of Rule 57AD of Central Excise Rules, 1944/sub-rule (2) of Rule 6 of Cenvat Credit Rules, 2001/2002 by maintaining separate accounts for receipt, consumption and inventory of inputs meant for use in the manufacture of dutiable final products and the quantity of inputs meant for use in the manufacture of exempted goods. But if he is manufacturing only the dutiable finished products, in the manufacture of which some waste emerges, which is fully exempt from duty or is a nil ..... X X X X Extracts X X X X X X X X Extracts X X X X
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