Agricultural waste exemption for bagasse-fired boilers: cane-crushing residue qualifies as waste used to produce energy.

Bagasse-fired boilers were treated as eligible for exemption under Notification No. 120/81-C.E. because bagasse was regarded as agricultural waste. The analysis noted that bagasse is a residue from crushing cane, is commonly used as fuel, and had earlier been treated in conference deliberations alongside other waste materials such as rice husk and wood waste. On that basis, devices using bagasse to produce energy fell within the notification covering agricultural and municipal waste conversion devices, so the exemption applied and the Revenue's challenge failed.

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Issues: Whether bagasse-fired boilers were eligible for exemption under Notification No. 120/81-C.E. on the basis that bagasse constituted agricultural waste.

Analysis: The exemption covered agricultural and municipal waste conversion devices producing energy. The record showed that bagasse is a residue obtained from crushing cane and is commonly used as fuel. The Tribunal relied on earlier conference deliberations treating waste materials such as rice husk, wood waste, and bagasse as agricultural waste. On that basis, bagasse was held to fall within the expression agricultural waste for the purpose of the notification.

Conclusion: Bagasse-fired boilers were eligible for the benefit of the exemption notification, and the Revenue's challenge failed.

Ratio Decidendi: Where a notification grants exemption to devices using agricultural waste to produce energy, bagasse, being cane-crushing residue and an agricultural waste, qualifies for the exemption.

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