2016 (6) TMI 992

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....facts of the present case are that appellant is engaged in manufacture and clearance of sugar and molasses falling under Chapter 17 of the First Schedule to Central Excise Tariff Act, 1985. The appellant is availing Cenvat credit on inputs/inputs services under the provisions of Cenvat Credit Rules, 2004. The appellant was issued a Show-Cause Notice dated 1.5.2012 by Assistant Commissioner of Central Excise alleging that part of electricity generated in their captive power plant has been sold during the period from April 2011 to December 2011 to Karnataka Power Transmission Corporation Ltd. (KPTCL) for consideration and hence, proportionate Cenvat credit amounting to Rs. 1,33,752/- attributable to electricity sold to KPTCL was liable to be ....

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.... under Rule 6 of Cenvat Credit Rules arises only in such cases where both dutiable and exempted final products are manufactured by the assessee and Cenvat credit has been availed on common inputs / input services. The only final products manufactured by the appellant are sugar and molasses. The learned counsel further submitted that bagasse is a waste by-product arising during the course of crushing of sugarcane cannot be equated with exempted goods and hence, there is no requirement to follow the procedure or adhering to the conditions laid down under Rule 6 of Cenvat Credit Rules. In support of this submission, he relied upon the judgement of Honble Allahabad High Court in case of Balrampur Chini Mills Ltd. Vs. Union of India [2014 (30....

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.... Union of India Vs. DSCL Sugar Ltd. reported in 2015 (322) E.L.T. 769 (S.C.) wherein Honble Supreme Court has held that bagasse is not the result of manufacture and hence not excisable. The learned counsel also submitted that this Tribunal in case of KCPL Sugar & Industries Corpn. Ltd. Vs. Commissioner [2015 (321) E.L.T. 538 (Tri.-Bang.)] has also held that bagasse is not the result of manufacture and this decision of CESTAT, Bangalore was affirmed by Hon'ble High Court of Andhra Pradesh. He further submitted that similar view was taken by the Tribunal's Mumbai Bench in case of Sharad SSK Ltd. Vs. Commissioner [2015 (321) E.L.T. 468 (Tri.-Mumbai)] wherein the decision of Hon'ble High Court in case of Balrampur Chini Mills (supra) was follo....