Availment & Utilisation of Cenvat Credit on Molasses in Composite Sugar Industry:

[venkata rao]

Composite Sugar Industry with sugar and distillery unit within the same premises. In sugar unit sugar and molasses are produced whereas in the distillery unit both excisable and exempted goods are produced.

Sugar Unit:

Sugar and Molasses produced in the sugar unit. Sugar is removed by payment of excise duty for domestic purpose. Molasses is an excisable by-product which is used as input in the distillery unit. As such for the use of captively produced molasses in the distillery unit, excise duty is paid and transferred to distillery unit.

Distillery Unit:

In the distillery unit captively produced molasses from the sugar unit is received as well as molasses from outside is procured for the production of final products are obtained likewise  Liq. CO2, D.Spirit, D.Ethanol which are excisable goods and Ethyl alcohol /undenaturated rectified spirit (URS) which are exempted are produced.(As such molasses is used as input for production of both excisable and exempted goods as such the compliance under Rule 6 of CCR  2004 is necessary)

Issue is:

Cenvat Credit on captively produced molasses is not being utilized from past four financial years.( I am of the view that cenvat credit on molasses can be taken for the past period also since Cenvat Credit Rules have not prescribed any outer time limit for taking cenvat credit)

Whileso the issue is whether the Cenvat Credit accumulated from past four financial years on captively produced molasses be utilized for payment of  duty on the excisable final goods produced in the distillery unit and whether is it sufficient if in compliance to Rule 6(3)(i) of CCR 2004  payment of amount equal to six percent or five percent(as applicable) of the value of exempted goods is paid/reversed and that any interest had to be paid on the amounts reversed or paid on the exempted goods(already removed)  for the past periods and if any interest had to be paid what is the rate of interest and under which rule/section is the interest payable if any.

Whether the cenvat credit on molasses be utilized for payment of excise duty on sugar?

K.V.RAO

9493425611

kedari.venkatrao at the rate of gmail.com

AI Summary

Composite Sugar Industry Challenges Cenvat Credit Use on Molasses; Seeks Clarity on Rule 6 of CCR 2004 Compliance A composite sugar industry, comprising sugar and distillery units, is questioning the utilization of Cenvat Credit on molasses produced in-house. The sugar unit produces sugar and molasses, with molasses being transferred to the distillery unit where both excisable and exempted goods are manufactured. The issue is whether the accumulated Cenvat Credit on molasses from the past four years can be used to pay excise duty on excisable products from the distillery. Additionally, clarification is sought on compliance with Rule 6 of CCR 2004, interest obligations, and applicability for sugar excise duty payments. The query remains unresolved.