TaxTMI 
TaxTMI 
2025 (1) TMI 138
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.... stated are that, the Appellant was engaged in the manufacture of Sugar and Molasses and during such process, Bagasse emerged as a bye product at the milling stage which was captively consumed in the co-generation plant for generating electricity which was in turn captively consumed in the sugar plant and also supplied to the grid of the Tamil Nadu Electricity Board (TNEB). Bagasse, being marketable was also sold to some customers. The Appellant was availing Cenvat credit of duty paid on inputs like lubricating oil, hydrochloric acid and other chemicals and also on inputs services, which were utilised towards payment of duty on Sugar and Molasses. It appeared to the department that the Bagasse, specified under Tariff Head 2203 2000 of Central Excise Tariff Act,1985 (CETA) and chargeable to Nil rate of duty, falls within the scope of definition of exempted goods in terms of Rule 2(d) of CCR. As the Appellant had availed and utilised Cenvat credit without maintenance of separate accounts for manufacture of dutiable and exempted goods as per Rule 6(2) of CCR and had not paid an amount mandated under Rule 6(3)(i) / 6(3)(ii) of CCR, it appeared that the Appellant had contravened the pro....
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....SCL Sugar [2014 (304) ELT33-ALL] and CCE, Trichy Vs. Tamilnadu Newsprint and Papers Limited [2014 (309) ELT 279]. v. It was submitted that the definition of Rule 2(d) of CCR would be applicable only to the exempted or final goods manufactured and hence not applicable to Bagasse which is not manufactured or produced from inputs/ input services in terms of definition of Rule 2(b) of CCR. vi. It was averred that there was no Cenvat credit availed on account of fraud, suppression of facts, contraventions of provisions of the act, etc. and hence imposition of penalty under Rule 15 of CCR was unjustified and not sustainable placing reliance on the decisions rendered in following judicial decisions: - (a) Maruti Udyog Ltd. Vs CCE, Noida- [2009 (238) ELT 180 (Tri.-Del.)] which was affirmed by Hon'ble Supreme Court. (b) CCE Vs. Grasim Industries Ltd. [2005 (183) ELT 123] (c) CCE Vs. Gujarat Narmada fertilisers Co. Ltd. [2009 (240) ELT 661 (SC)] (d) Parryware Roca (P) Ltd Vs. CCE, Salem [2010-TIOL-1594-CESTAT-Mad] (e) India cements Ltd. Vs. CCE, Salem [2011-TIOL-185-CESTAT-Mad] (f) Saint Gobain Glass India Ltd. Vs. CC(Ai....
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.... 2012 seeking to recover the Cenvat credit availed and utilised in the manufacture of dutiable and exempted products as the Appellant had not maintained separate records thus contravening the provisions of Rule 6 of CCR. The Appellant have denied the allegations of the department and maintained that Bagasse was only an intermediary or waste emerging during the course of manufacture and not a final product and that the issue was already settled in favour of the Assessees relying on numerous decisions of the judicial fora. 9. We find that the identical issues as involved in the present case, was also involved in the case of M/s. Ponni Sugars (Erode) Limited cited supra wherein Chennai Bench of this Tribunal has allowed the appeal by setting aside the demands of Cenvat credit. It is pertinent to reproduce the relevant findings of the Tribunal in the above cited case, herein below: "10. The Explanation 1 to Rule 6 of the CENVAT Credit Rules, which was inserted with effect from 01.03.2015, reads as under:- "Explanation 1. - For the purposes of this rule, exempted goods or final products as defined in clauses (d) and (h) of rule 2 shall include non-excisable goods cl....
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.... 32. In absence of Bagasse being a manufactured final product, the obligation of a reversal of Cenvat period under Rule 6(1) of the Cenvat Credit Rules, 2004 is not attracted. It has also been noticed that Bagasse has always been an "exempted goods" under Rule 2(d) of the Cenvat Credit Rules, 2004. It has been mentioned in Central Excise Tariff Heading 2303 20 000 and was subjected to NIL rate of duty. It therefore, fell within the definition of "exempted goods" as defined under Rule 2(d) and is not a non-excisable goods, as mentioned in the impugned circular. 33. That the Circular dated 25-4-2016 interpreting Explanation 1 to Rule 6 has provided that "consequently, Bagasse, dross and skimmings of non-ferrous metal or any such by-product of waste, which are non-excisable goods and are cleared for consideration from the factory need to be treated like exempted goods for purpose of reversal of credit of input and input services, in terms of Rule 6 of the Cenvat Credit Rules, 2004. The circular therefore treating Bagasse to be a non-excisable goods, is clearly erroneous, and for this reason also the Circular dated 25-4-2016 is liable to be quashed with regard to Bagasse....