CENVAT credit reversal on bagasse use as boiler fuel was not required under Rule 6 in sugar manufacture.

Where bagasse emerged as a waste product in sugar manufacture and was used as fuel in boilers, the requirement to reverse CENVAT credit or pay an amount under Rule 6 was not upheld. The dispute was treated as covered by the earlier Allahabad HC ruling quashing the Board circular that had required such reversal or payment in these circumstances, so the impugned orders were found unsustainable and the appeals were allowed with consequential relief.

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Issues: Whether the appellant was required to reverse CENVAT credit or pay an amount under Rule 6 in respect of input services used in sugar manufacture when bagasse emerged as a waste product and was used as fuel in boilers.

Analysis: The dispute was held to be covered by the earlier decision of the Allahabad High Court, which had quashed the Board's circular requiring reversal of credit or payment under Rule 6 in such circumstances. Following that view, the impugned orders were found unsustainable.

Conclusion: The requirement to reverse CENVAT credit or pay an amount under Rule 6 was not upheld, and the appeals were allowed with consequential relief.

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