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TMI Blog2019 (10) TMI 1100X X X X Extracts X X X X X X X X Extracts X X X X ..... process involved in Bagasse s production. Bagasse, pressmud and composed fertilizer is not goods but merely a waste or byproduct therefore Rule 6 of the Cenvat Rules shall have no application in the present case and they are bound to come into existence during the crushing of the sugarcane and are an unavoidable agricultural waste. The amendment dated 1.3.2015 in Rule 6 ibid has wrongly been relied upon by both the authorities below while coming to the conclusion that the assessee is liable to reverse the Cenvat Credit availed by them. The Hon ble Supreme Court in the matter of D.S.C.L. Sugar Ltd. has laid down that bagasse being an agricultural waste or residue, there could be no manufacturing activity. If that is so and if bagasse is not ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ourse of manufacture of sugar and molasses, by product Babasse emerges which is a waste/residue byproduct/refuse. The assessee are availing Cenvat Credit of duty paid on various inputs, capital goods and service tax paid on various input services in terms of Cenvat Credit Rules. According to Revenue, bagasse is capable of being sold and appeared to be excisable goods and the tariff rate of duty for bagasse is NIL and therefore it is exempted from whole of the duty of Central Excise, but the assessee are not maintaining any separate account of inputs/input services used for manufacture of both exempted and duty paid goods as provided in Rule 6(2) ibid nor paid an amount equal to 6% of the value of exempted good i.e. bagasse as provided under ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rt upto this Tribunal, in support of his argument that reversal of Cenvat Credit under Rule 6 is not required in respect of waste or byproduct or refuse generated during the process of manufacturing. The list of the cases cited by learned counsel are as under:- (i) M/s. Balrampur Chini Mills Ltd. vs. UOI; 2019(5)TMI 972 (All.HC) (ii) M/s. Athani Sugars Ltd. vs. Commr.CGST; 2019(2) TMI 379-Ces.-Mum (iii) CCT, Pune-II vs. Chhatrapati SSK Ltd.; 2019(2) TMI 1301- Cestat Mumbai (iv) M/s.Pannageshwar Sugar Mills Ltd.vs.CCE ST; 2018(10) TMI 966- Ces.Mum (v) M/s.Shri Vitthalsai SSK Ltd. vs. Commr.CGST CE; 2018(10)TMI 1153- Ces.Mum (vi) Kichha Sugar Co.Ltd.vs.CGST CC CE; 2018(10)TMI 1151-Cestat Del. (vii) Commr.CT CE vs. Gokak Sugars Ltd.; 2018(10) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... - Explanation 1. - For the purposes of this rule, exempted goods or final products as defined in clauses (d) and (h) of rule 2 shall include non-excisable goods cleared for a consideration from the factory. Explanation 2. - Value of non-excisable goods for the purposes of this rule, shall be the invoice value and where such invoice value is not available, such value shall be determined by using reasonable means consistent with the principles of valuation contained in the Excise Act and the rules made thereunder. . According to Revenue since the exempted goods and final products defined under the Cenvat Credit Rules, 2004 in clauses (d) and (h) respectively include non-excisable goods, which is cleared for consideration from factory, hence R ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... acture and it can safely be concluded that there has to be a manufacturing activity for invoking the aforesaid Rule. The Hon ble Supreme Court in the matter of D.S.C.L. Sugar Ltd.(supra) has laid down that bagasse being an agricultural waste or residue, there could be no manufacturing activity. If that is so and if bagasse is not manufactured, the same cannot be held to be excisable, in which case the amendment which has been relied upon by the authorities below as well as by the Revenue, would not apply. In all the decisions of the Tribunal which has been cited by the learned counsel, a consistent view has been taken that bagasse which emerges as a waste/by-product, falls outside the scope of Rule 6 ibid. 6. In view of the discussions made ..... X X X X Extracts X X X X X X X X Extracts X X X X
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