Tribunal sets aside order on excise duty for bagasse and press mud, allows cenvat credit without separate accounts.

The Tribunal allowed the appeal, setting aside the order confirming demands and penalties. Relying on legal precedent from the Supreme Court, it held that bagasse and press mud are agricultural waste not subject to excise duty, thus not contravening Rule 6 of Cenvat Credit Rules 2004. The decision established that availing cenvat credit on common inputs without separate accounts for dutiable and exempted goods was permissible in this case.

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Issues:
- Contravention of Rule 6 of Cenvat Credit Rules 2004 by availing cenvat credit on common inputs used in manufacturing both dutiable and exempted goods without maintaining separate accounts.

Analysis:
1. The case involved Nizam Deccan Sugars Limited, manufacturers of cane sugar, cane molasses, bagasse, and press mud. The appellants were availing cenvat credit on common inputs without maintaining separate accounts for dutiable and exempted goods, leading to a show cause notice for contravention of Rule 6 of Cenvat Credit Rules 2004. The original authority confirmed demands and imposed penalties, which were appealed by both the appellants and the Department.

2. During the hearing, no one appeared for the appellant, while the Department supported the impugned order. The issue was whether the appellant contravened Rule 6 of Cenvat Credit Rules 2004 by availing cenvat credit on common inputs without maintaining separate accounts for dutiable and exempted goods.

3. The Tribunal referred to a judgment of the Hon'ble High Court of Allahabad in the case of Balrampur Chini Mills Limited vs. CCE, Allahabad, which held that bagasse arising in the course of sugar manufacture cannot be treated as excisable goods. The judgment was upheld by the Hon'ble Supreme Court in the case of Union of India vs. DSCL Sugar Limited, where it was clarified that bagasse and press mud are agricultural waste and residue, not resulting from any manufacturing process, thus not subject to Rule 6 of Cenvat Credit Rules 2004.

4. Following the Supreme Court's decision, the Tribunal held that the impugned order confirming demands and penalties could not be sustained. The judgment established that bagasse and press mud are agricultural waste, not subject to excise duty, and therefore, the appeal was allowed.

5. The Tribunal concluded by setting aside the impugned order and allowing the appeal based on the legal precedent established by the Hon'ble Supreme Court regarding the non-applicability of Rule 6 of Cenvat Credit Rules 2004 to bagasse and press mud as agricultural waste products.

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