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TMI Blog2015 (3) TMI 954X X X X Extracts X X X X X X X X Extracts X X X X ..... molasses was used in the manufactured of un-denatured ethyl alcohol. Duty demand of ₹ 6,35,38,125/- in respect of the clearances of molasses for captive use to the distillery unit appears to be on a strong footing. Since the un-denatured ethyl alcohol/extra neutral ethyl alcohol are non-excisable items, the molasses used for manufacture of these products would not be eligible for Cenvat credit and according to the Department Cenvat credit of ₹ 5,34,03,535/- has been availed in respect of molasses used for manufacture of non-excisable goods. Though the appellant plead that they had been reversing the Cenvat credit in respect of the quantity of molasses used for the manufacture of un-denatured ethyl alcohol/extra neutral ethyl alcohol by treating the same has exempted final product, this claim has to be examined in detail which can be done only at the stage of final hearing. - this is not the case for total waiver from the requirement of pre-deposit. - Partial stay granted. - Excise Stay Application No. 50458 of 2014 in Appeal No. 50354 of 2014 - Stay Order No. 50233/2015 - Dated:- 20-1-2015 - Shri Rakesh Kumar And Shri S. K. Mohanty,JJ. For the Appellant : ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... products, an amount in terms of Rule 6 (3) (ii) has not been paid and such amount payable for the period from February 2011 to August 2011 is ₹ 48,48,388/-. The second objection of the Department is that while the appellant have cleared the in-house production of molasses for captive use to the distillery unit by availing duty exemption under Notification No. 67/95-CE, this exemption would not be admissible to the extent molasses has been used in the manufacture of non-excisable goods, namely extra neutral alcohol (ENA), which during the period of dispute was not figuring in the Central Excise Tariff and as such was non-excisable. On this basis duty demand of ₹ 1,04,28,750/- for the period from February 2011 to August 2011, duty demand of ₹ 3,39,35,925/- for the period from October 2011 to June 2012 and duty demand of ₹ 1,91,73,450/- for the period from July 2012 to March 2013 has been raised by separate show cause notices. Third objection of the Department is that Cenvat credit in respect of duty paid molasses received from outside would not be admissible to the extent the same has been used in or in relation to manufacture of non-excisable goods namely ext ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ule 25 of the Central Excise Rules, 2002 and also another penalty of 50% of ₹ 5,32,56,450/- under Rule 15 of Cenvat Credit Rules, 2004 readwith Section 11AC (b) of Central Excise Act, 1944. 1.4 Against the above order of the Commissioner this appeal has been filed alongwith stay application. 2. Heard both the sides in respect of stay application. 3. Shri P.K. Sahu, Advocate, the learned Counsel for the appellant, pleaded that the Tribunal in the case of Ugar Sugar Works Ltd. vs. CCE, Belgaum reported in 2007 (214) E.L.T. 337 (Tri. Bang.) after examining the sub-heading 22072000 of the restructured Central Excise Tariff, as it stood w.e.f. 01/3/05, has held that the sub-heading 22072000 covers, in addition to the denatured spirit, the un-denatured spirit also, that this judgment of the Tribunal has been affirmed by Hon ble Bombay High Court in the case of Niphad Sakhar Karkhana Ltd. vs. CCE, Nashik reported in 2014 (300) E.L.T. 66 (Bom.), that the entry Ethyl alcohol and other spirits, denatured, of any strength against sub-heading 22072000 would cover not only the denatured ethyl alcohol of any strength but also un-denatured ethyl alcohol of any strength, that, the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l rate of duty and in case the dutiable goods as well as exempted goods have been manufactured, in respect of the exempted goods, the amount as per the provisions of Rule 6 of the Cenvat Credit Rules, 2004 has not been paid, that since none of these situations are there in this case, the exemption Notification No. 67/95-CE in respect of captive clearances of molasses to the distillery unit cannot be denied, that the impugned order is, therefore, not correct, that the appellant have strong prima facie case in their favour and, that therefore, the requirement of pre-deposit of duty/Cenvat credit demand, interest thereon and penalty may be waived for hearing of the appeal and recovery thereof may be stayed till the disposal of the appeal. 4. Shri Pramod Kumar, learned Jt. CDR, opposed the stay application by reiterating the findings of the Commissioner in the impugned order and pleaded that rectified spirit/extra neutral alcohol manufactured by the appellant are non-excisable goods, that this fact would be clear by comparing the heading 2207 of the Central Excise Tariff with the corresponding heading 2207 of the Customs Tariff, that while the heading 2207 in the Customs Tariff cove ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... not be available, that in view of this, the Commissioner has correctly denied the benefit of Notification No. 67/95-CE in respect of the quantity of molasses captively cleared which has been used in the manufacture of non-excisable goods rectified spirit/extra neutral alcohol, that as regards the demand of an amount of ₹ 48,48,388/- under Rule 6 (3) (ii) readwith Rule 6 (3A) of the Cenvat Credit Rules, 2004, this demand is in respect of clearances of bagasse press mud/bio-compost and electricity which are excisable goods chargeable to nil rate of duty and hence exempted goods in term of definition of this term in Rule 2 (d) of the Cenvat Credit Rules, 2004, and that since the appellant have not reversed the proportionate credit in respect of the inputs/input services used in or in relation to manufacture of exempted goods, this demand has correctly been made. Shri Pramod Kumar, therefore, pleaded that there is no infirmity in the impugned order and the appellant have not been able to establish prima facie goods in their favour. He, therefore, pleaded that this is not the case for waiver from the requirement of pre-deposit. 5. We have carefully considered the submissions ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d of dispute i.e. during the period w.e.f. 01/03/05, heading 2207 of the Central Excise Tariff covers only ethyl alcohol and other spirits, denatured, of any strength and while the sub-headings 220710, 22071011, 22071019 and 22071090 of the Central Excise Tariff have been left blank and there is absolutely nothing mentioned against these sub-heading, only the sub-heading 22072000 of the Central Excise Tariff covers ethyl alcohol and other spirits, denatured of any strength . On the other hand, the corresponding heading 2207 of the Customs Tariff, covers un-denatured ethyl alcohol of an alcoholic strength by volume of 80% vol. or higher and Ethyl Alcohol and other spirits, denatured, of any strength . Thus the Customs heading 2207 in addition to ethyl and other spirits, denatured of any strength also covers un-denatured ethyl alcohol of alcohol of alcoholic strength by volume of 80% vol. or higher . The Customs sub-heading 220710 covers un-denatured ethyl alcohol of an alcohol strength by volume 80% vol. or higher and the sub-heading 22071011 of the Customs Tariff covers concentrates of alcoholic beverages and sub-heading 22071019 and 22071090 of the Customs Tariff cove ..... X X X X Extracts X X X X X X X X Extracts X X X X
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