2013 (12) TMI 1140

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....anufacturing operations for all the products from such molasses. From molasses alcohol is produced. At that stage, it is not an excisable item since it is potable alcohol not subject to Central Excise Levy. Most of the quantity of alcohol is sold as 'Extra Neutral Alcohol' that is potable non-exisable alcohol. However, a portion of the alcohol obtained is de-natured by adding certain chemical substances, which will make the product unsuitable for human consumption. Such product is commonly known as 'de-natured spirit' (DNS) or 'Industrial Alcohol'. This DNS is taken up for further manufacture of dutiable products like Acetaldehyde, Acetic Acid and Ethyl Acetate. The applicant had taken CENVAT credit of molasses going into the manufacture of....

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....his appeal along with stay petition for admission of appeal. 5. The learned counsel for the applicant submits that the argument of Revenue is that the applicant availed CENVAT credit in respect of molasses, which is exclusively used in non-excisable Extra Neutral Alcohol is not correct. ENA comes into existence first and then it is de-natured, if it is to be used for industrial purpose. The fact that a raw material goes through an intermediate stage, where it is exempt or non-excisable, is not a valid reason to deny credit. He also argues that the applicant possess all the duty paying documents and the worksheet is only for arriving at the portion of molasses that gets converted into dutiable alcohol. CENVAT credit is not taken at the st....