2018 (10) TMI 1151 – CESTAT NEW DELHI – TMI – CENVAT Credit – by-product/waste – bagasse & press-mud arising out of manufacture of V P Sugar & molasses – Rule 6 (3) of CCR – whether the impugned waste invites the payment of excise duty in accordance of Rule 6 (3) of CCR, 2004?
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Held that:- The Hon’ble Apex Court in the case of Union of India vs. DSCL Sugar Ltd [2015 (10) TMI 566 – SUPREME COURT] has held that products like bagasse and press-mud do not qualify the definition of Section 2F of CEA and as such are not being a manufacture. These are only an agricultural waste and residue which itself is not the result of any process and in the absence of manufacture, there cannot be any excise duty. The Hon’ble Apex Court further clarified that since it is not a manufacture, Rule 6 of the Cenvat Credit Rules shall have no application.
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This rule was amended w.e.f. 01.03.2015 – however, since the main condition for Rule 6 is still, “obligation of a manufacturer or producer of fina
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one common Order-in-Appeal. Hence, a common order for both these appeals. Details are as follows:- Sl.No. Appeal No. SCN date Period involved Amount involved O-I-O Date O-I-A Date 1 E/52210/18 24.06.18 June 15 to March 16 12,22,586/- & same amt. Of penalty 31.03.2017 12.03.2018 2. E/52211/ 18 29.09.15 September, 2014 to May, 2015 3,41,336 & same amt. Of penalty 23.11.2016 12.03.2018 2. Facts relevant for the purpose are as follows:- 2.1 The appellants herein are engaged in manufacture of VP Sugar and molasses having Central Excise Registration and are availing credit of duty paid on inputs, capital goods and input services used in manufacture of their final products under Rule 3 of Cenvat Credit Rules, 2004 (CCR). Beside the manufacture of said final products, the products called bagasse & press-mud are also cleared by the appellant against the consideration. Resultantly, show cause notices as above were issued in respective appeals raising the demand as recovery of Central
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epartment is alleged to have confirmed the demand for an amount of 6% to be required to be paid on the clearance of such waste relying upon Rule 6 (3) of CCR. 5.1 Ld. Counsel has submitted the following case laws:- 1. Union of India vs. DSCL Sugar Ltd. – 2015 (322) |E.L.T. 769 (S.C.) 2. M/s. Simbhaoli Sugar Ltd. vs. CCE, Noida in Appeal No. E/70496/2018 vide Final Order No.71567/2018 3. M/s.Eco Cane Sugar Energy Ltd. & Others -2017 (12) TMI 950 – CESTAT-Mumbai 4. Kisan Sahkari Chini Mills Ltd. vs. CCE, Lucknow – 2017 (355) ELT 156 (Tri.- All.) 5.2 Order is prayed to be set aside. Appeal is prayed to be allowed. 6. Ld. D.R., per contra, has justified the order impressing upon it to be a speaking order. Thus, he prayed for both the appeals to be dismissed. 7. After hearing both the parties I am of the opinion as: 7.1 The moot question in the given circumstances is as to whether the impugned waste invites the payment of excise duty in accordance of Rule 6 (3) of CCR, 2004. 8. The peru
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oval or for provision of exempted service except in the circumstances mentioned in sub-rule (2): Provided that the CENVAT credit on inputs……………… 8.1 This rule was amended w.e.f. 01.03.2015 by inserting: 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 & where such invoice value is not available such value shall be determined by using reasonable means consistent with the principles of valuation contained in Excise Act & Rules made there-under. The words used in or in relation to the manufacture clarifies that prior to 01.03.2015 this rule is invokable only where there is the activity of manufacture. As already discussed above that the goods in dispute are not the outcome of manufacture
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