Cenvat credit rule on common inputs does not apply to biofertilizers made from press mud waste.

Rule 6(3)(b) of the Cenvat Credit Rules, 2002 did not apply to enriched press mud and vermi compost prepared from press mud, because press mud was only a waste product arising incidentally in the manufacture of sugar and molasses, not a final product manufactured from common inputs. As the provision targets final products produced using common inputs, no liability could be fastened on the biofertilizers derived from such waste. The demand was therefore unsustainable and was set aside in favour of the assessee.

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Issues: Whether Rule 6(3)(b) of the Cenvat Credit Rules, 2002 applied to enriched press mud and vermi compost prepared from press mud, which was a waste product arising in the manufacture of sugar and molasses.

Analysis: Press mud was found to be a waste product obtained in the course of manufacture of sugar and molasses, and the enriched press mud and vermi compost were prepared from that waste. For Rule 6(3)(b) to apply, the goods must be final products manufactured using common inputs. Since press mud was not a final product but a waste product, the demand could not be sustained under that rule.

Conclusion: Rule 6(3)(b) of the Cenvat Credit Rules, 2002 was held inapplicable to the biofertilizers prepared from press mud, and the demand was set aside in favour of the assessee.

Ratio Decidendi: A waste product arising incidentally in manufacture is not a final product for the purpose of Rule 6(3)(b), and no liability can be fastened under that provision on goods prepared from such waste.

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