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TMI Blog2025 (1) TMI 138X X X X Extracts X X X X X X X X Extracts X X X X ..... 14 dated 28.11.2014 passed by the Commissioner of Central Excise, Madurai confirming the demands of Rs.1,06,34,961/-, Rs.35,02,546/-, Rs.26,58,837/-and Rs.18,55,058/- under Rule 14 of Cenvat Credit Rules, 2004(CCR) read with Section 11A(1) of Central Excise Act, 1944 (ACT), along with applicable interest and imposing penalty equal to the demands confirmed, under Rule 15(1) of CCR, 2004. 2. Facts briefly stated are that, the Appellant was engaged in the manufacture of Sugar and Molasses and during such process, Bagasse emerged as a bye product at the milling stage which was captively consumed in the co-generation plant for generating electricity which was in turn captively consumed in the sugar plant and also supplied to the grid of the Tam ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nds of Appeal are that: - i. the issue was no more res integra in view of the Hon'ble High Court of Allahabad's decision in the case of M/s. Balrampur Chini Mills Ltd. Vs Union of India [2014 (300) ELT 372 (All.)] whereby the CBEC Circular No. 904/24/2009-CX dated 28.10.2009 and Circular dated 03.10.2009 were held to be invalid and quashed. ii. Bagasse emerged only as a waste/ intermediary/ bye -product during crushing of sugarcane during the manufacturing process and though marketable, duty could not be imposed on it as there was no manufacturing activity involved and therefore Rules 6(1), 6(2) and 6(3) of CCR were not applicable. iii. It was submitted that it is a settled law that Bagasse generated from the crushing of sugarcane is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the act, etc. and hence imposition of penalty under Rule 15 of CCR was unjustified and not sustainable placing reliance on the decisions rendered in following judicial decisions: - (a) Maruti Udyog Ltd. Vs CCE, Noida- [2009 (238) ELT 180 (Tri.-Del.)] which was affirmed by Hon'ble Supreme Court. (b) CCE Vs. Grasim Industries Ltd. [2005 (183) ELT 123] (c) CCE Vs. Gujarat Narmada fertilisers Co. Ltd. [2009 (240) ELT 661 (SC)] (d) Parryware Roca (P) Ltd Vs. CCE, Salem [2010-TIOL-1594-CESTAT-Mad] (e) India cements Ltd. Vs. CCE, Salem [2011-TIOL-185-CESTAT-Mad] (f) Saint Gobain Glass India Ltd. Vs. CC(Air), Chennai [2011-TIOL-722-CESTAT-Mad] (g) MRK Coop Sugar Mills Ltd. Vs. CCE, Pondicherry [2014 (307) ELT 228] 4. The Ld. Counse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n these appeals is:- i. Whether the Appellant is liable to pay an amount equivalent to 5% / 6% on the value of Bagasse clearances in terms of Rule 6(3) of CENVAT Credit Rules, 2004? 8. We find that the Appellant engaged in the manufacture of sugar and molasses were availing credit on inputs/ inputs services and during the manufacture, Bagasse, a Bye product is produced which in turn is used in the generation of electricity, a non-dutiable product which is both captively consumed for Sugar manufacturing and also supplied to the grid of the TNEB. Besides, the Bagasse produced is cleared to some Customers for generation of power. The Department issued these four Show Cause Notices for the period between November 2010 to November 2012 seekin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e with the above Explanation. However, the said Circular came to be challenged before the Hon'ble High Court of Allahabad in the case of Balrampur Chini Mills Ltd. (supra) and the same was held to be invalid and quashed. The relevant portion of the said decision of the Hon'ble Allahabad High Court reads as under: - "27. After the aforesaid judgment which has clearly held Bagasse not to be a manufactured product, and therefore Rule 6 of the Cenvat Credit Rules, 2004 shall have no application, Section 6(1) has been amended by inserting the 2 Explanations, which the respondent contends is sufficient to include Bagasse within the fold of Section 6, and further to justify the stand for a reversal of Cenvat Credit Rules, 2004. 28. A perusal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as 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 therefore, fell within the definition of "exempted goods" as defined under Rule 2(d) and is not a non-excisable goods, as mentioned in the impugned circular. 33. That the Circular dated 25-4-2016 interpreting Explanation 1 to Rule 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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