2014 (6) TMI 52 - AT - Central Excise

CESTAT Bangalore rules in favor of sugar manufacturer exempting excise duty under Cenvat Credit Rules

The Appellate Tribunal CESTAT BANGALORE ruled in favor of the appellant, a sugar manufacturer, in a case involving the sale of Bagasse and Press Mud ... Sale of waste goods without payment of excise duty - maintenance of separate accounts for inputs and input services - obligation under Rule 6(3) of Cenvat Credit Rules, 2004 to deposit percentage of value on sale of inputs/waste - reversal of Cenvat credit on disposal of wasteSale of waste goods without payment of excise duty - maintenance of separate accounts for inputs and input services - obligation under Rule 6(3) of Cenvat Credit Rules, 2004 to deposit percentage of value on sale of inputs/waste - Whether the appellant, a manufacturer who sold bagasse and press mud as waste without payment of duty, was required to maintain separate accounts for inputs and input services and to deposit 10% of the value under Rule 6(3) of the Cenvat Credit Rules, 2004. - HELD THAT: - The Tribunal accepted the appellant's submission and followed the ratio in Rallis India Ltd. v. UOI [decision relied upon by the parties], holding that when waste products arising in the course of manufacture are sold without payment of duty there is no requirement to maintain separate accounts for inputs and input services for the purpose of invoking the deemed reversal under Rule 6(3). Applying that precedent to the facts, the Tribunal found the principle squarely applicable and that no further factual or final-stage adjudication was necessary. [Paras 2]The requirement to deposit 10% under Rule 6(3) and to maintain separate accounts did not arise in respect of the sale of bagasse and press mud sold without payment of duty; appeal allowed.Final Conclusion: Appeal allowed by applying the precedent in Rallis India Ltd.; appellant not directed to deposit 10% under Rule 6(3) for sale of waste sold without payment of duty, and consequential relief granted; stay application disposed of. The Appellate Tribunal CESTAT BANGALORE ruled in favor of the appellant, a sugar manufacturer, who sold Bagasse and Press Mud without paying excise duty. The appellant was not required to pay 10% of the value under Rule 6(3) of Cenvat Credit Rules, 2004 as they did not maintain separate accounts for inputs. The decision was based on the case of Rallis India Ltd. v. UOI. The appeal was allowed, and the stay application was disposed of.