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TMI Blog2024 (5) TMI 3X X X X Extracts X X X X X X X X Extracts X X X X ..... stment would only be an activity outside the definition of service, since it is a transaction in money. This made the revenue to assume that the appellant had not maintained separate records for the receipt, storage/inventory and disposal of input/input services for the manufacture of dutiable, final products, namely Sugar, Molasses and Bagasse & Press mud. Since, Bagasse and other wastes emerging during the course of manufacture of Sugar, were either exempted or attracted 'nil' rate of duty. It was the further the case of the revenue that bio compost is manufactured by treating Press mud with some chemicals and hence, both Bagasse and Press mud were marketable, as being covered under the definition of excisable goods under section 2(d) of the Excise Act, 1944. Revenue therefore assumed that the appellant had contravened the provisions of Rule (6) of CENVAT credit rules as they had not maintained separate accounts for receipt, consumption and inventory. This prompted the revenue to issue statements of demand dated 01.09.2017 and 06.07.2018, proposing to recover 6% of the value of exempted goods with applicable interest and penalty. After due process and after considering the explan ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rule 6(3) of CCR, failure to do so which would attract duty liability equal to 6% of the value of the exempted products/services. 4. In the second appeal, Order-in-Original No. 21/2017-CE dated 29.03.2017 passed by the Commissioner of Central Excise & Service Tax, Salem has been challenged, wherein, the Ld. Authority has confirmed the demand being 6% of the value of exempted service. 5. We find that common facts and issues are involved, both the appeals are being considered for common disposal. Based on the facts as contended, the following issues are to be decided by us: "(i). Whether the investment in shares is an exempted service, requiring the reversal of credit? And (ii). Whether Press mud is waste product like Bagasse?". Further, since the issue involves the exigibility of goods/service tax, it is for the Revenue to prove their case conclusively. 6. We are tempted to consider the second issue to start with, since it was contended by the Ld. Advocate for the appellant that the same is covered by the decision of Hon'ble Supreme Court in the case of DSCL Sugar Limited [2015 (322) E.L.T. 769 (S.C.)], wherein it has been held that waste product such as Bagasse is not an e ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and is now to be treated like exempted goods for the purpose of a reversal of input and Input service. 30. As noted by the Hon'ble Supreme Court in the case of Union of India and Others v. M/s. DSCL Sugar Ltd. and Others (supra) specifically in the contest of Bagasse, Rule 6 applies only when there is a manufacture of final products or of exempted products, and if there is no manufacture, Rule 6 of the Cenvat Credit Rules, 2004, has no application. 31. This amendment may have the effect of treating Bagasse to be an exempted goods, but cannot result in Bagasse being manufactured goods, as the nature of Bagasse remains that of an agricultural waste and residue and is not in effect a product. This aspect and character of Bagasse remains unaltered by insertion of Explanation 1. 32. In absence of Bagasse being a manufactured final product, the obligation of a reversal of Cenvat period under Rule 6(1) of the Cenvat Credit Rules, 2004 is not attracted. It has also been noticed that Bagasse has always been an "exempted goods" under Rule 2(d) of the Cenvat Credit Rules, 2004. It has been mentioned in Central Excise Tariff Heading 2303 20 000 and was subjected to NIL rate of duty. It ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ositive findings in this regard. It was for the revenue to prove that 'investment' itself was a service, in order to demand service tax. Rather, the first appellant authority himself has at paragraph No.14.01 observed that "... such investment would be an activity outside the definition of service, being a mere transaction in money" but, however, has concluded in the same para that activity of investment in shares and derivative trade satisfy the definition exempted services under Cenvat Credit Rules, 2004. 13. We fail to understand the logic in treating the mere 'investment' as an exempted service because, the revenue has not specifically alleged if there is any 'service' in the first place. Secondly, up to 01.07.2012, even if it is assumed to be an exempted service, then the same was not taxable. With the introduction of negative list w.e.f. 01.07.2012, S. 66B of the Finance Act empowers the levy of service tax on the value of all services other than those in the negative list, which are provided or agreed to be provided, by one person to another. Exempted service, although 'exempted', nevertheless should satisfy the ingredients of 'service' in the first place. 14. It is clear ..... X X X X Extracts X X X X X X X X Extracts X X X X
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