TaxTMI 
TaxTMI 
2023 (7) TMI 430
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....ss mud, boiler ash and Sludge under Rule 6(3) of the Cenvat Credit Rules, 2004 alongwith interest and penalty. 2. The issue involved herein is whether the appellant is liable to pay an amount equal to 6% of the sale value of exempted goods/products i.e. Bagasse, press mud, boiler ash and sludge generated during the manufacturing of sugar/molasses in terms of Rule 6(3) of Cenvat Credit Rules, 2004? 3. The appellants are manufacturer of sugar, molasses and ethyl alcohol and during the process of manufacturing sugar and molasses various by products bagasse, press mud, boiler ash and sludge were generated which, as per the appellants, are nothing but waste/residue byproduct/refuse and admittedly these by products have been sold by the app....
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.... Sakhar Karkhana Ltd. vs. Commr. CGST& CE, Aurangabad; 2022(12)TMI 6- CESTAT Mumbai in which this Tribunal allowed the appeal filed by the assessee therein. The relevant paragraphs of the said decision are reproduced as under:- "xxx xxx xxx 4. The appellants are manufacturer of sugar and molasses and during the process of manufacturing sugar & molasses by-products bagasse, press mud, boiler ash were generated which, as per the appellants, are nothing but waste/residue/refuse. It is admitted fact that the appellant sold the aforesaid by-products/ waste in the market. Accordingly for the periods December, 2015 to June, 2017 department issued three show cause notices dated 5.1.2018 & 8.1.2018 respectively demanding amou....
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....ared on payment of duty as well as the goods which were exempted from duty i.e. press mud, bagasse and boiler ash and cleared the exempted goods without payment of duty. He further submitted that pressmud, bagasse and boiler ash are capable of being sold and appeared to be excisable goods and the tariff rate of duty for pressmud is NIL and therefore it is exempted from whole of the Central Excise duty, but the appellants are not maintaining any separate account of inputs/ input services used for manufacture of both exempted and duty paid goods as provided in Rule 6(2) ibid nor paid an amount equal to 6% of the value as provided under Rule 6(3) ibid as amended vide notification dated 1.3.2015 as in view of the amendment in Rule 6 w.e.f. 1.3.....
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.... emerges as agricultural waste or residue and are not manufactured goods. Rule 6 was amended in order to include the inputs used in relation to the manufacture of exempted goods. As such it can be seen that the same relates to the manufacture and it can safely be concluded that there has to be a manufacturing activity before invoking the aforesaid Rule. The Hon'ble Supreme Court in the matter of DSCL Sugar Ltd.(supra) has laid down that bagasse being an agricultural waste or residue, there could be no manufacturing activity. The aforesaid decision squarely applies on the facts of the instant appeals and apart from bagasse, since pressmud and boiler ash are also emerged as waste, the same also cannot be held to be excisable. Xxx xxx....
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....ufacturer is engaged in the manufacture of any final product which is chargeable to duty as well as any other final product which is exempted from whole of duty or chargeable Nil rate of duty using Cenvat inputs. But here the manufacturer i.e. appellant here is not manufacturing bagasse or pressmud or boiler ash. These are by-products only and merely emerge as waste or residue while manufacturing sugar and molasses from sugar cane. None of the by-products falls within the definition of manufacture and in its absence nothing can be demanded from the appellant. It is not the case anywhere that after the amendment on 1.3.2015 by-products/ waste/residue have been included in the definition of 'manufacture' and therefore in my view the provision....