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of <h1>Sugar Manufacturer Wins Appeal: Tribunal Grants Exemption, Citing Compliance with Rule 6 for Molasses Duty Reversal.</h1> The Tribunal allowed the appeal, ruling in favor of the appellant, a sugar manufacturer, by granting the exemption under Notification No. 67/95. The ... Exemption - rectified spirit - Captive consumption - Cenvat/Modvat credit - Held that: - similar issue decided in the case of GODAVARI SUGAR MILLS LTD. Versus COMMISSIONER OF C. EX., BELGAUM [2006 (11) TMI 497 - CESTAT, BANGALORE], where it was held that where the final product is Ethyl Alcohol and other spirits denatured of any strength, it is sufficient if the cenvat credit attributable to inputs in the exempted product is reversed or paid - appeal allowed. Issues:Appeal to vacate demand of duty and cess, exemption under Notification No. 67/95, obligation under Rule 6 of CCR, 2002, maintain separate accounts, reversal of input credit, misstatements by assessee, demand of duty on molasses consumed.Analysis:The case involved an appeal seeking to vacate a duty and cess demand, interest, and penalty imposed on the appellants for not paying duty on molasses consumed in the manufacture of rectified spirit. The appellant, a sugar manufacturer, availed exemption under Notification No. 67/95 on molasses used to produce rectified spirit. However, the Commissioner alleged that the appellant failed to maintain separate accounts and pay the required amount under Rule 6 of CCR, 2002, leading to the duty demand.During the hearing, the appellant's counsel argued that they reversed the input credit availed and fulfilled the obligations under Rule 6, making them eligible for the exemption. The appellant produced a certificate confirming the reversal of input credit, claiming compliance with the rules and eligibility for the exemption sought.The Senior Departmental Representative (SDR) supported the impugned order, echoing the Commissioner's reasoning for demanding duty on the molasses consumed. However, the Tribunal referred to a previous decision by the Bangalore Bench, which clarified the conditions for availing exemption under Notification 67/95. The decision emphasized that if the manufacturer complies with Rule 6 of CCR, 2002, by maintaining separate accounts or reversing input credit, they are entitled to the exemption even if the final products include both dutiable and exempted items.Based on the precedent set by the Bangalore Bench decision, the Tribunal allowed the appeal filed by the appellant, as the appellant had fulfilled the obligations under Rule 6 and was entitled to the benefit of the exemption for using molasses in the production of rectified spirit and denatured spirit. The Tribunal concluded that the demand for duty on the molasses was incorrect, thereby ruling in favor of the appellant.In summary, the judgment resolved the issues related to the obligation under Rule 6 of CCR, 2002, the maintenance of separate accounts, and the reversal of input credit, ultimately granting the appellant the exemption under Notification No. 67/95 for using molasses in manufacturing rectified spirit and denatured spirit.
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