Press mud sold as a waste product did not attract Rule 6(3)(b) liability under Cenvat credit principles.

Press mud arising incidentally in sugar manufacture was held not to be an exempted excisable product for Rule 6(3)(b) of the Cenvat Credit Rules, 2004. The Tribunal applied earlier decisions on bagasse and noted that a waste product does not become dutiable merely because it is sold for consideration. It accepted the view that the amended definition of goods under Section 2(d) of the Central Excise Act, 1944 did not alter the position for such by-products. The demand was therefore set aside, with consequential relief to the assessee.

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Issues: Whether press mud emerging during manufacture of sugar was liable to be treated as an exempted excisable product so as to attract payment under Rule 6(3)(b) of the Cenvat Credit Rules, 2004.

Analysis: The Tribunal noted that press mud had already been held in several decisions to be non-excisable. The Revenue relied on the amended definition of goods under Section 2(d) of the Central Excise Act, 1944 and the fact that press mud was sold for consideration, but the Tribunal found the issue to be identical to the one decided in relation to bagasse. Since both bagasse and press mud arise as waste products during the manufacture of sugar, the earlier decision holding that the amendment did not alter the position was applied.

Conclusion: Press mud was not liable to be treated as an exempted excisable product for the purpose of Rule 6(3)(b), and the demand was set aside in favour of the assessee.

Final Conclusion: The impugned order was set aside and the appeal was allowed with consequential relief.

Ratio Decidendi: A waste product arising incidentally in the manufacture of sugar does not become dutiable merely because it is capable of sale for consideration, and Rule 6(3)(b) cannot be invoked unless the product is shown to be an exempted excisable final product.

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