cenvat credit

[harpreet arora]

i want to know whether baggase can be treated as excisable product. The  issue is that in case of suagar factories, they are manufacturing sugars from sugarcane. Two situations rae there

i. the bagasse generated as bye product they are seling outside the factory.

ii. bagasse so generated are being used within factory thermal plant and steam is generated steam  so generated  iss used in the production of electricity which is partly captively consumed within factory in sugar production activity and remaining part is used in workers quarters of the factory employee and if remains the part is sold to the KPTCL for the public usage. Whether they are required to reverse the cenvat credit on that prt of electricity which is sold outside under Rule 6(3) of CCR 2004.  I also want to know that they are doing a very good work of generating power from waste like baggase for the publics use so should we not take leanient view for this and not demand the reversal of cenvat credi. since we are spending so much money to promote nonconventional source of energy and these sugar factory people are also doing the little bit same although for their own purpose. 

[Mukesh Kumar]

After amendment to section 2(f) of the Central Excise Act, 1944, any thing which ever is sold would be liable to duty of excise irrespective of the fact that it is marketable or not.

In the absence of more details of bagasse, it is difficult for me to comment further.

AI Summary

Excisability of by products: sale or use of bagasse may trigger excise treatment and cenvat reversal on sold electricity. Whether bagasse is an excisable product when sold or used to generate electricity affects whether cenvat credit must be reversed under Rule 6(3) of CCR 2004. The responder observes that amendment to section 2(f) of the Central Excise Act makes any item sold liable to excise duty regardless of marketability, and declines further comment for want of more details about the bagasse and transaction structure.