Rule 6 Cenvat credit liability on bagasse and press-mud fails where they are treated as agricultural residue.

Bagasse and press-mud removed during the relevant period were held not liable to reversal under Rule 6 of the Cenvat Credit Rules, 2004 where common input credit had been availed. The Tribunal noted that, after the amendment to the explanation to Rule 6(1), the issue was no longer res integra and followed the Supreme Court view that bagasse and press-mud do not arise from manufacturing activity but are agricultural waste and residue. On that basis, the demand under Rule 6 could not survive, and the liability was set aside.

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Issues: Whether bagasse and press-mud removed during the relevant period could attract liability under Rule 6 of the Cenvat Credit Rules, 2004 as non-excisable goods when common input credit was availed.

Analysis: The relevant period was after the amendment to the explanation under Rule 6(1) of the Cenvat Credit Rules, 2004. The Tribunal noted that the controversy was no longer res integra because the same issue in the assessee's own case had already been decided by the Tribunal, following the Supreme Court's ruling that bagasse and press-mud do not arise from manufacturing activity and are agricultural waste and residue. On that basis, the demand founded on Rule 6 could not survive.

Conclusion: The issue was decided in favour of the assessee, and the liability under Rule 6 was set aside.

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