TaxTMI 
TaxTMI 
2018 (9) TMI 245
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....er. The appellant/assessee is a manufacturer of sugar. They also manufacture certain other commodities as follows: a. Dutiable Products - Sugar, Molasses, Denatured Spirit, Fuel Oil, etc., and b. Exempted Final Products - Organic manure, Rectified Spirit, Bagasse, Bio earth and power. 3. They have been availing CENVAT credit on inputs as well as input services. As far as the inputs are concerned, they have reversed the CENVAT credit taken on the inputs which went into generation of exempted products like power, Bagasse etc. but they have not reversed proportionate credit taken on input services going into manufacture of dutiable and final products as required under Rule 6 of CENVAT Credit Rules, 2004. Therefore, show ca....
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....e a power division which uses bagasse to produce power, part of which is captively consumed and part of which is sold without payment of excise duty, since, electricity is not liable to excise duty. They also have a distillery division which distils the molasses produced in the sugar division into Ethyl alcohol. Part of the Ethyl alcohol is denatured and sold as denatured spirit on payment of Central Excise duty and part of the Ethyl alcohol is not denatured and is sold as such without payment of Central Excise duty (Ethyl alcohol which is not denatured is liable to State Excise duty). The Press Mud which is generated in the sugar unit is further processed by adding spent wash generated during the manufacture of Ethyl alcohol and is convert....
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.... e. The extended period of limitation is not invokable as there was no fraud, collusion, wilful misstatement or suppression of facts on their part and they have not contravened any provisions of Act or Rules made there under with intent to evade payment of duty. Therefore, the extended period of limitation does not apply at all and neither does the demand sustained. 5. Learned Counsel took the Bench through the annexures to the show cause notice and submits that the calculations made in the show cause notice are incorrect because some products have been treated as exempted products in the show cause notice but are dutiable. Bio-earth/organic manure, fusel oil are liable to payment of duty and are being cleared on payment of duty.....
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....ty on molasses, was set aside. The learned departmental representative reiterated the arguments made in the Order-in-Original and Order-in-Appeal and submits that the appellant is liable to reverse the credit on the input services which have gone into the exempted products. 6. I have carefully considered the arguments on both sides. The show cause notice alleges that they have not reversed the input service credit which has gone into production of several exempted products. Of these products, bagasse have already been held by the Supreme Court to be just waste and not an exempted product requiring reversal of CENVAT credit. There are also other products with respect to which the appellant claims that they have already reversed the CENVAT....