9911796707
TMI Blog2014 (10) TMI 639X X X X Extracts X X X X X X X X Extracts X X X X ..... , Excise and Service Tax Appellate Tribunal. Respondent Bazpur Cooperative Sugar Factory Limited has two plants situated in the same factory premises. It has a sugar mill and a distillery unit. In the sugar mill, it manufactures Vacuum Pan Sugar and Molasses out of sugarcane. In the distillery unit, it is mainly manufacturing alcoholic liquor for human consumption, namely, country spirit and Indian made foreign liquor. It also manufactures rectified spirit and denatured spirit. Rectified spirit attracts NIL rate of duty and denatured spirit attracts 16 per cent ad valorem. Molasses is the only input used for manufacturing of the commodities in the distillery unit. Till April, 2003, respondent has not taken credit on molasses. It was noticed, however, from the month of May, 2003, the respondent started availing credit on molasses in the distillery unit. It is found that it took credit on molasses received since January, 2003 and used the same towards payment of duty. While scrutinizing the return of the party for the months July, 2005 to March, 2006, it was observed that the stock of rectified spirit was short by 33172.80 Bulk Litres. It was shown as wastage. The rectified spirit, b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n any specific provision, one way or the other, there would be no difficulty in accepting or rejecting the claim of the appellant at the threshold. However, the fact that there is no provision does not mean the appellant's claim is to be rejected outright. 8. One cannot lose sight of the volatile nature of rectified spirit. It is not difficult to visualize that in whatsoever manner it may be stored, some loss is bound to occur as a result of natural causes having regard to the nature of the goods. If it is a fact that under the State Excise Law storage loss up to 0.5% is allowed, that can be taken to be a safe basis for allowing a similar benefit under the Central Excise Law as well. Dealing with the same goods i.e. rectified spirit, a learned Single Member of this Tribunal in Shree Siddheshwar SSK Limited (supra) observed as under: "It is noticed that in this particular case both the raw materials and the finished goods in question are susceptible to losses in storage and the losses recorded are reportedly within the permissible norms of the State Excise authorities. The losses in storage of the finished products, namely, rectified spirit are in the nature of invisible losses. W ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ). (2) Where a manufacturer avails CENVAT credit in respect of any inputs, except inputs intended to be used as fuel, and manufactures such final products which are chargeable to duty as well as exempted goods, then, the manufacturer shall maintain 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 and take CENVAT credit only on that quantity of inputs which is intended for use in the manufacture of dutiable goods. (3) The manufacturer, opting not to maintain separate accounts shall follow conditions, as applicable to him, namely- (i) goods falling within heading 22.04 of the first schedule to the tariff act; (ii) (iii) - - (viii) The manufacturer shall pay an amount equivalent to the CENVAT credit attributable to inputs used in, or in relation to the manufacture of such final products at the time of their clearance from the factory." 7. He would, therefore, submit that the point of controversy actually arose with reference to the argument of the respondent that the reversal of credit is contemplated under Rule 6(3) only ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... restored on payment of Rs. 5,000/- as cost. According to the learned counsel for the appellant, there is miscommunication. He would, in fact, invite our attention to the judgment of the Apex Court in the case of Commissioner of Central Excise, Raipur vs. Hira Cement, reported in (2006) 2 SCC 439. He would submit that, in that case also, one of the orders of the Commissioner was not challenged and effect of the same was dealt with as under: "23. Before us, the parties have placed the entire facts. We may also place on record that it has been conceded before us by the learned counsel appearing on behalf of the Respondent that the earlier order dated 26.9.2001 shall not operate as a res-judicata but, as noticed hereinbefore, the only contention raised was that once the Revenue accepts a judgment, it cannot raise the said question once again. 24. Although some decisions to this effect have been cited by Mr. Santhanan, we are of the opinion that the matter should be considered afresh by the Tribunal upon considering all aspects of the matter. We refrain ourselves from going into the said question. We may, however, notice that a Bench of this Court in Government of W.B. v. Tarun K. Roy ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in respect of which CENVAT credit is claimed must be itself dutiable. Rectified spirit, as we have already noted, is not dutiable being assessable at NIL rate, which, by the CENVAT Credit Rules, is exempted. Being exempt the final product, respondent could not possibly have claimed CENVAT credit in respect of the same. We notice, in fact, the reasoning of the first appellate authority, wherein the issue has been culled out as under: "The issue is not regarding condonation of losses in respect of final products on account of natural causes. The issue is whether credit in respect of inputs used for exempted goods is at all available or not and whether, in terms of option exercised by an assessee to take the credit at the time of receipt of inputs, whether the same is required to be reversed when the goods are made out of it do not exist. IO find that the appellant themselves agree that in case rectified spirit is cleared from the factory, the Cenvat credit is to be reversed as the goods are wholly exempted from payment of duty. Can there be a possibility that when exempted goods exist and are cleared, Cenvat is to be reversed but when the same are lost, the same credit is not to be ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
