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TMI Blog2012 (8) TMI 922X X X X Extracts X X X X X X X X Extracts X X X X ..... y. The applicants are engaged in the activity of manufacture of sugar and molasses. The waste obtained during the manufacture of sugar are referred as bagasse, press mud and bio-compost. The Revenue is of the view that the applicants availed credit in respect of common inputs and input service in the manufacture of final product cleared on payment of duty and in respect of the goods which are cleared without payment of duty and are not maintaining separate account therefore, the applicants are liable to pay appropriate duty as provided in the Cenvat Credit Rules, 2004, on the price of bagasse, press mud and bio-compost the demands are confirmed. 4. The applicants submitted that bagasse, press mud and bio-compost cannot be treated as m ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on the same ground. 7. The contention of the Revenue is that in the Central Excise Tariff Act. bagasse is specifically mentioned and attracting nil rate of duty and press mud is also excisable goods and also manufactured products and the same are classifiable under Chapter-heading No. 2303 20 00 of the Tariff. The Revenue also relied upon the decision in the case of Commissioner of Income Tax v. N.C. Budharaja & Co. - AIR 1993 S.C. 2529 to submit that the word produce or manufacture has to be understood in the normal connotation the sense in which it is understood in commercial world. It is equally well to keep in mind the context since a word takes its colour from the context. The word articles is preceded by words it has begun or b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Court after taking into consideration the decision of the Supreme Court in the case of CCE v. Shakumbhari Sugar & Allied Industries Ltd. (supra) held that bagasse generated from the crushing of the sugarcane which is neither manufactured goods nor manufactured final product, but it is a residue/waste and the demand by invoking the provisions of Rule 6 is not sustainable. Further, we find that the Tribunal in the case of Indian Potash Ltd. (supra) after taking into consideration the decision of the Hon'ble Supreme Court in the case of Shakumbhari Sugar & Allied Industries Ltd., also taken the same view and held as under :- "6. We have considered the rival submissions. We find that bagasse emerges in course of crushing of sugarcane. It ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd of 5%/10% on press mud, which are in the nature waste, is not sustainable and held as under :-. "5. I have considered arguments from both sides, the case records as well as the cite case laws. The impugned goods namely, press mud and sludge are classifiable respectively under CET Heading 2303 20 00 and 2303 30 00. Regarding such classification there is no dispute raised by either side. However, against the entries in both these Headings, the duty amounts specified is nil. The Explanation to Section 2(d) is a deeming clause which renders any goods which are capable of being bought and sold for a consideration to be marketable. The cited decision of the Hon'ble Allahabad High Court in the case of Hindalco Industries (supra) is also t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of input used for manufacture of exempted goods. The expression exempted goods has been defined for the purpose of Cenvat Credit Rules in Rule 2(d) to mean excisable goods which are exempt from the whole of duty of excise leviable thereon and includes goods which are chargeable to nil rate of duty. As per this definition, the impugned goods namely press mud and sludge would be covered under the definition exempted goods, though the same cannot be treated as excisable goods for the reasons stated in paragraph 5 above. The question raised in this case is whether in terms of Rule 6(3)(i.), an amount equal to 10%/5% would be payable on such goods. While considering this question, I take note of the fact that these goods are definitely in the n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in the nature of by-product and waste and also non-excisable cannot be sustained. 9. Consequently, the impugned order is set aside and the three appeals are allowed." 9. We find that the Hon'ble Supreme Court decision in the case of Commissioner of Income Tax v. N.C. Budharaja & Co. is not applicable in the facts of present case as the Hon'ble Supreme Court was interpreting the provisions of Income Tax which are not parallel to the provisions of Central Excise Act and Rules. 10. In respect of Bio-compost the Tribunal in the case of Manakpur Chini Mills (supra) held that demand of duty in respect of Bio-Compost cleared by sugar manufacturer is not available. 11. We find no reason to take contrary view as the issues i ..... X X X X Extracts X X X X X X X X Extracts X X X X
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