2017 (9) TMI 1545

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....lling the said products. Appellants were availing cenvat credit on various common inputs and input services which were utilised in the manufacture of sugar and molasses as well as the exempted goods viz; Bagasse and Press Mud, however did not maintain any separate account for receipt consumption and inventory of the said inputs/input services. Department took the view that appellant had thereby contravened provisions of Rule 6 of Cenvat Credit Rules 2004 with intent to evade payment of 10% or 5% (as the case may be) of the value of exempted goods inasmuch as cenvat credit was availed on common inputs which were utilised in manufacture of both dutiable and exempted goods. Proceedings were initiated by issue of show cause notice dated 04.05.2....

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....ble goods, it continues to remain waste and it does not become manufacture of final product for the purposes of rule 6 of Cenvat Credit Rules, 2004. The relevant portions of that judgment is reproduced hereunder for ready reference:- "Thus, it is not in dispute that the bagasse is an agricultural waste of sugarcane, though marketable product, but the duty cannot be imposed as it does not involve any manufacturing activity simply by adding an explanation under Section 2(d) of the Central Excise Act, 1944,whereby the definition of goods has been defined will not make bagasse, which, as stated hereinabove, is an agricultural waste to be a dutiable item and the Chief Commissioner vide Circular dated 03.10.2009 nullified the judgment and orde....