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TMI Blog2024 (5) TMI 1191X X X X Extracts X X X X X X X X Extracts X X X X ..... which itself is not the result of any process. Therefore, it cannot be treated as falling within the definition of Section 2(f) of the Act and the absence of manufacture, there cannot be any excise duty. There are no merits in this appeal filed by the revenue - appeal dismissed. - ( SANJIV SRIVASTAVA ) MEMBER ( TECHNICAL ) Shri Manish Raj , Authorised Representative for the Appellant Shri Nagendra Krishna , Advocate for the Respondent ORDER SANJIV SRIVASTAVA : These appeals are filed by the revenue against Order-in-Appeal No.MRT/EXCUS/000/APPL-MRT/287/2020-21 dated 31/03/2021 passed by Commissioner (Appeals) Central Goods Services Tax, Meerut. By the impugned order, following has been held- 6. In view of the above discussion and findings, the appeal filed by the Assistant Commissioner, CGGST Division-Shamli against the impugned Order-in-Original No 10-13/AC/D-SML/2020-21 dated 30.09.2020 passed in the case of M/s SBEC Sugar Ltd. Village- Malakpur, Baraut, Baghpat (U.P.) is rejected. 2.1 Respondents are engaged in manufacture of excisable goods namely sugar, molasses, ethyl alcohol/ rectified spirit, denatured ethyl alcohol Fusal oil. They are also availing the CENVAT Credit of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to 6% of the value of exempted goods (in case of a manufacturer) and of value of exempted services (in case of a service provider) [Rule 6(3)(i)], or (b) to pay an amount equal to the proportionate CENVAT credit attributable to inputs, and input services used in, or in relation to, the manufacture of exempted goods, or providing of exempted services, subject to the conditions and procedures stipulated in Rule 6(3A) [Rule 6(3)(ii)]. 2. The said party did not maintain separate records/accounts in respect of inputs and input services used in the manufacture of exempted goods namely Bagasse Press-Mud during the relevant period. Thus, they were required to choose any of the options given in Rule 6(3) of CENVAT Credit Rules, 2004 prevailing during the relevant period. However, the said party neither paid an amount equal to 6% of the value of exempted goods nor reversed proportionate credit attributable to inputs/input services used for the manufacture of exempted goods as envisaged under the said Rule 6(3) of CENVAT Credit Rules, 2004. 3. Rule 6 of the CENVAT Credit Rules, 2004 was amended vide Notification No.6/2015-CE(NT) dated 01.03.2015 in as much as in sub-rule (1), after the provi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Leave Petition against the Hon'ble High Court's order. 6. In the matter it is noteworthy to mention that in the case of M/s Indian Sucrose Limited Vs UOI [CWP No. 10018 of 2018 (O M)] the Hon'ble High Court of Punjab and Haryana at Chandigarh vide its decision dated 04.03.2020 has allowed the appeal of the said Petitioner but therein has also observed that In this view of the matter and in view of the categoric statement made by the learned counsel for the petitioner, we allow this writ petition in the same terms as the above judgment with liberty to the Revenue to file an application for review in case the assertion regarding the judgment having been permitted to become final is not correct . In respect of the said Order dated 04.03.2020 the Department has filed SLP (C) [No. 001700/2021; Diary No. 585/2021] in the Hon'ble Supreme Court. 7. The instant appeal is being filed in terms of Para 4 of CBEC's Instruction bearing F. No. 390/Misc./116/2017-JC dated 22-8-2019 read with Para 1.3 of CBEC's Instruction bearing F. No. 390/Misc/163/2010-JC dated 17.08.2011 wherein it has been stipulated and specified that: 1.3. Adverse judgments relating to the following s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the case, grounds of appeal and the submissions made by the respondent. I find that the issue involved in the present appeal stands decided by the Hon'ble Apex Court in the case of M/s DSCL Sugars [ 2015(322) ELT 769 (SC)]. Besides, the Commissioner (Appeals), Meerut had already set aside the demands for the previous period, vides OIA No.MRT/EXCUS/000/APPL-MRT/374/2018-19 dated 26.11.2018 (hereinafter referred to as the OIA ) in the respondent's own case and the appeal filed by the department against the OIA had already been rejected by the Hon'ble CESTAT vides its Final Order no. 71111/2019 dated 18.06.2019. Further, in a catena of cases, it had been consistently held that the provisions of Rule 6 of CCR were not applicable in the case of bagasse and press-mud which emerged during the process of manufacture of sugar. The issue of applicability of amended provisions of Rule 6 of the Rules, and Board's Circular No. 1027/15/2016-CX dated 25.04.2016 w.e.f. 01.03.2015 was no more open for decision in the present appeal. I also find that the appeal filed by the department against the judgement of the Hon'ble High Court, Allahabad in the case of Balrampur Chini Mi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r of output service avails of Cenvat credit in respect of any inputs or input services, and manufactures such final products or provides such output service which are chargeable to duty or tax as well as exempted goods or services, then, the manufacturer or provider of output service shall maintain separate accounts for receipt, consumption and invertory of input and input service meant for use in the manufacture of dutiable final products or in providing output service and the quantity of input meant for use in the manufacture of exempted goods or services and take Cenvat credit only on that quantity of input or input service which is intended for use in the manufacture of dutiable goods or in providing output service on which service tax is payable. (3) Notwithstanding anything contained in sub-rules (1) and (2), the manufacturer of goods or the provider of output service, opting not to maintain separate accounts, shall follow either of the following options as applicable to him, namely :- (i) the manufacturer of the goods shall pay an amount equivalent to five per cent of the value of the exempted goods and the provider of output service shall pay an amount equal to six per cent ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and thus excisable. 25. Considering the aforesaid amendment Hon ble Supreme Court in Union of India and Others v. M/s. DSCL Sugar Ltd. and Others (supra) held :- However, before the aforesaid fiction is to be applied, it is necessary that the process should fall within the definition of manufacture as contained in Section 2(f) of the Act. 26. The Hon ble Supreme Court also considered the definition of manufacture as provided in Section 2(f) of the Act wherein there is a deeming provision a mounting to manufacture in respect of certain goods, and specifically with regard to Bagasse and held as under :- In the present case it could not be pointed out as to whether any process in respect of Bagasse has been specified either in the section or in the chapter notice. In the absence thereof this deeming provision cannot be attracted. Otherwise, it is not in dispute that Bagasse is only an agricultural waste and residue, which itself is not the result of any process. Therefore, it cannot be treated as falling within the definition of section 2(f) of the Act and [in] the absence of manufacture, there cannot be any Excise duty. Since it is not a manufacture, Rule 6 of the Cenvat Credit Rule ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 6 has provided that consequently, Bagasse, dross and skimmings of non-ferrous metal or any such by-product of waste, which are non-excisable goods and are cleared for consideration from the factory need to be treated like exempted goods for purpose of reversal of credit of input and input services, in terms of Rule 6 of the Cenvat Credit Rules, 2004. The circular therefore treating Bagasse to be a non-excisable goods, is clearly erroneous, and for this reason also the Circular dated 25-4-2016 is liable to be quashed with regard to Bagasse. 34. In light of the above we are of the considered opinion that in absence of Bagasse being a manufactured final product, the obligation of reversal of Cenvat Credit under Rule (1) of the Cenvat Credit Rules, 2004 is not attracted, and the ratio laid down in the judgment of the Hon ble Supreme Court in the case of Union of India and others v M/s. DSCL Sugar Ltd and Others (supra) still holds the field. Rule 6 of the Cenvat Credit Rules would have no application for reversal of Cenvat Credit in relation to Bagasse. The Circular No. 1027/15/2016-CX, dated 25-4-2016, contained in Annexure-1 to the writ petition to the extent that it includes Bagass ..... X X X X Extracts X X X X X X X X Extracts X X X X
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