2022 (1) TMI 506

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....ellants including the appellant before us. Commissioner (Appeals) has vide impugned order, upheld the order in original No. Satara/121-125/Adj/2011 dated 03.01.2012 of the Assistant Commissioner, Central Excise, Satara Division, by which adjudicating authority held as follows: "Order 22.1 Under the provisions of the Rule 14 & Explanation-III to Rule 6 (3A) of the Cenvat Credit Rules, 2004, read with provisions of Section 11A(2) of the Central Excise Act, 1944, I confirm the demand of - i. Rs. 2,11,712/- (Rupees Two Lakhs Eleven Thousand Seven Hundred and Twelve only) equivalent to 10% or 5%, as the case may be, of the total value of exempted goods viz. Bagasse, Pressmud & Compost Fertilizer, manufactured and cleared dur....

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.... any representation. 2.2 Heard the learned Authorised Representative and perused the records. 3.1 On perusal of the records, it is noticed that the issues that arise for consideration are: • Whether bagasse/press-mud are excisable products in terms of Section 2(d) of the Central Excise Act, 1944 and whether any manufacturing activity is involved in the manufacture of bagasse/press-mud, as defined under Section 2(f) of the Central Excise Act, 1944. • Whether the bagasse/press-mud can be considered as final products in terms of CENVAT Credit Rules, 2004? • Whether the appellant was required to pay an amount equal to 5% of the value of the exempted goods i.e. bagasse/press-mud, as pre Rule 6(3) of C....

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....e Central Excise Tariff Act, 1985. In the process of manufacture of sugar, sugarcane is crushed, its juice is extracted and Bagasse emerges as residue/waste of sugarcane. 4. It is not in dispute that Bagasse is otherwise classified under Chapter sub-heading No. 2303 20 00 of the First Schedule to the Central Excise Tariff Act, 1985 and attracts nil rate of duty. 5. However, show cause notices were issued to the respondents herein stating that Bagasse would be subject to duty under the Central Excise Act, 1944, as "other products". These show cause notices were issued to the respondents in terms of the provision contained in Rule 6(3) of the Cenvat Credit Rules, 2004 demanding various amounts. The said show cause notices we....

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....us excisable. 8. However, before the aforesaid fiction is to be applied, it is necessary that the process should fall within the definition of "manufacture" as contained in Section 2(f) of the Act. The relevant portion of amended Section 2(f) reads as under : Section 2(f) - "manufacture" includes any process - (i) incidental or ancillary to be completion of a manufactured product; (ii) which is specified in relation to any goods in the section or Chapter notes of [The First Schedule] to the Central Excise Tariff Act, 1985 (5 of 1986) as amounting to [manufacture; or] (iii) which in relation to the goods specified in the Third Schedule, involves packing or repacking of such goods in a unit contain....