2007 (10) TMI 501 - AT - Central Excise

Tribunal rules bagasse not subject to excise duty, based on legal interpretations.

The Tribunal dismissed the application for rectification of mistake, affirming that bagasse is considered a waste generated during the manufacturing ... Rectification of mistake - Error apparent on record - Cenvat/Modvat Issues involved:1. Rectification of mistake in the final order regarding the excisability of bagasse.2. Interpretation of whether bagasse is excisable goods or waste under Central Excise Rules.3. Applicability of Rule 57CC of Central Excise Rules on bagasse clearance without duty payment.Analysis:In this case, the main issue revolved around the rectification of a mistake in the final order related to the excisability of bagasse. The Revenue contended that bagasse should be considered excisable goods based on a decision by the Hon'ble Madras High Court in a previous case. However, the Tribunal, supported by the Hon'ble Supreme Court's decision in a separate case, held that bagasse is a waste obtained during the manufacturing process of sugar and is not to be treated as a final product. This distinction was crucial in determining the excisability of bagasse.Another significant aspect of the case was the interpretation of whether bagasse should be classified as waste or an excisable product under the Central Excise Rules. The Tribunal, in line with the Supreme Court's decision, maintained that bagasse is a byproduct of the manufacturing process and not the final product itself. This interpretation played a pivotal role in deciding the applicability of Rule 57CC of the Central Excise Rules on the clearance of bagasse without duty payment.Regarding the applicability of Rule 57CC, the Tribunal's decision was influenced by the understanding that bagasse is a waste arising during the manufacturing process and not the final product. The Revenue argued that the respondents should pay a percentage of the value of exempted goods under Rule 57CC. However, the Tribunal, supported by a previous case involving CCE v. Allied and the subsequent Supreme Court dismissal of the Revenue's appeal, maintained that the provisions of Rule 57CC were not applicable to the clearance of bagasse as it is considered a waste generated during the manufacturing process.Ultimately, the Tribunal dismissed the application for rectification of mistake, emphasizing that the issue before the Hon'ble Madras High Court regarding the manufactured nature of bagasse was distinct from the current dispute. The respondents were found to be clearing bagasse without payment of duty based on the understanding that it is a waste generated during the manufacturing process, not a final product subject to excise duty. The decision was based on established legal interpretations and precedents, including those set by the Hon'ble Supreme Court, supporting the Tribunal's view on the excisability and classification of bagasse.