Bagasse treated as waste product: Rule 6(3) under the Cenvat Credit Rules held inapplicable on these facts.

Bagasse, generated only after crushing sugarcane and extracting juice in sugar manufacture, was treated as a waste product and not as excisable goods. On that basis, Rule 6(3) and Rule 6(3A) of the Cenvat Credit Rules, 2004 were considered inapplicable to the clearance of bagasse in these facts. The Revenue's reliance on a different input-credit dispute was distinguished because it arose in a separate factual setting. The applicants were therefore granted waiver of pre-deposit and stay of recovery of duty, interest and penalty.

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Issues: Whether Rule 6(3) of the Cenvat Credit Rules, 2004 applied to bagasse cleared as a waste product and whether pre-deposit and recovery of duty, interest and penalty should be waived.

Analysis: The applicants were manufacturing sugar and allied products and bagasse emerged only after crushing of sugarcane and extraction of juice. Bagasse was treated as a waste product and the Tribunal noted its consistent view in identical matters that bagasse is not excisable goods. On that basis, the applicability of Rule 6(3) and Rule 6(3A) was held to be inapposite to the facts. The decision relied on by the Revenue was distinguished as dealing with a different input-credit controversy and a different factual setting.

Conclusion: Rule 6(3) did not apply to bagasse in the present facts, and the applicants were entitled to waiver of pre-deposit and stay of recovery.

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