AI OCR 
TaxTMI 
TaxTMI 
TaxTMI 
2012 (7) TMI 905
X X X X Extracts X X X X
X X X X Extracts X X X X
....pect of common inputs and input service in the manufacture of final product cleared on payment of duty and in respect of the goods which are cleared without payment of duty and are not maintaining separate account therefore, the applicants are liable to pay appropriate duty as provided in the CENVAT Credit Rules, 2004, on the price of bagasse and press mud and the demands are confirmed. 3. The applicants submitted that bagasse and press mud can be treated as manufactured goods and the issue is settled by the decision of the Hon'ble High Court of Allahabad in the case of Balrampur Chini Mills Ltd. vs. Union of India and Others in Writ Petition No. 11791 (M/B) of 2010 order dated 18.5.2012 after relying the decision of the Hon'ble Supr....
X X X X Extracts X X X X
X X X X Extracts X X X X
....keep in mind the context since a word takes its colour from the context. The word articles is preceded by words it has begun or begins to manufacture or produce . It also takes in the bye-product which emerges in the course of manufacture of goods. The contention of the Revenue is that as bagasse and press mud is produced during the manufacture of sugar and molasses and therefore, it cannot be said that the same are not excisable goods. As the goods are produced during the manufacture of sugar and molasses and nil rate of duty are applicable and the demands are rightly made. 5. We find that the demand is confirmed by invoking the provisions of Rule 6 of CENVAT Credit Rules, 2004 which provides that in case of manufa....
X X X X Extracts X X X X
X X X X Extracts X X X X
....llied Industries Ltd., also taken the same view and held as under:- 6. We have considered the rival submissions. We find that bagasse emerges in course of crushing of sugarcane. It may be noted that crushing of sugarcane is necessary to extract can sugar juice which in turn is processed for production of sugar and molasses. Bagasse is the waste product left after the crushing of sugarcane. Therefore, by no stretch of imagination it can be said that the assessee possible could have maintained separte account for the inputs for production of sugar and molasses (excisable item) andd bagasse. Thus, in our considered view, the amendment in Finance Act, cited by Shri Nagesh Pathak, AR and the Board Circular would no....
X X X X Extracts X X X X
X X X X Extracts X X X X
....The Explanation to Section 2(d) is a deeming clause which renders any goods which are capable of being bought and sold for a consideration to be marketable. The cited decision of the Hon'ble Allahabad High Court in the case of Hindalco Industries (supra) is also to this effect. This deeming fiction became necessary to be created in the light of various judgements that merelyb because some goods are sold they cannot be held to be marketable and consequently they cannot be considered to be excisable as excisability implied manufacture and marketability. However, the main definition of excisable goods under Section 2(d) is as under:- Excisable goods means goods specified in the First Schedule and the Second Schedule to the C....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ough the same cannot be treated as excisable goods for the reasons stated in paragraph 5 above. The question raised in this case is whether in terms of Rule 6(3)(i), an amount equal to 10% / 5% would be payable on such goods. While considering this question, I take note of the fact that these goods are definitely in the nature of by-product and waste. In the cited decision in Rallies India (supra), the Hon ble Bombay High Court, reversing the earlier decision of the Larger Bench of the Tribunal, has held that when common inputs are used in manufacture of dutiable and exempted products, the liability to pay the amount of 8% as it was applicable at the relevant time would arise only for final products and not for waste. This....