Whether Rule 6 would apply in respect of waste products generated during the course of manufacture of sugar?

PJ/CASE LAW/2015-16/2677

Case:- SHRI SIDHESHWAR SSK LTD. VERSUS COMMR. OF C. EX., PUNE-III

Citation:- 2014 (309) E.L.T. 495 (Tri. - Mumbai)

Brief Facts:-The application for early hearing has been filed by Shri Sidheshwar Sahakari Sakhar Karkhana Ltd. on the ground that the issue involved in the appeal is already covered by various decisions of the Tribunal and of the Hon’ble High Courts. The issue involved is whether Rule 6 of the Cenvat Credit Rules, 2004 would apply in respect of bagasse and press-mud generated during the course of manufacture of sugar and the assessee-manufacturer is required to reverse Cenvat credit on the inputs contained in the waste product generated or in the absence of maintenance of separate records, whether payment @ 5%/6% of the value of exempted goods needs to be done?

Appelants Contention:-None represented the appellant.

Respondents Contention:-The learned Additional Commissioner (AR) appearing for the Revenue fairly submits that the issue is already covered by the various decisions of the Tribunal and of the Hon’ble High Courts.

Reasoning Of Judgement:-The tribunal observe that the issue covered in this appeal is covered by the decisions of this Tribunal and of various High Courts. The issue involved is whether Rule 6 of the Cenvat Credit Rules, 2004 would apply in respect of bagasse and press-mud generated during the course of manufacture of sugar and the assessee-manufacturer is required to reverse Cenvat credit on the inputs contained in the waste product generated or in the absence of maintenance of separate records, whether payment @ 5%/6% of the value of exempted goods needs to be done? As the issue involved lies in a narrow compass, they take up the appeal itself for consideration and disposal. This Tribunal considered the very same matter in the case of Commissioner of Central Excise, Pune-IIv. DY Patil SSK Ltd. & Ors.- 2014-TIOL-475-CESTAT-MUM and held that the waste products arising in the course of manufacture of sugar such as bagasse and compost fertilizer, cannot be considered as final products, and, therefore, payment of a sum equal to 10%/5% of the price of the goods is not required to be made in terms of Rule 6(3) of the Cenvat Credit Rules, 2004. The said decision was based on the decision of the Hon’ble High Court of Allahabad in the case of Balrampur Chini Mills Ltd.v. Union of India- 2013-TIOL-557-ALL-CX = 2014 (300)E.L.T.372 (All.); and of this Tribunal in the case of Indian Potash Ltd.v. Commissioner of Central Excise, Allahabad- 2012-TIOL-1402-CESTAT-DEL = 2012 (281)E.L.T.622 (Tri.-Del.) and ECO Sugar Energy Ltd. - 2013-TIOL-288-CESTAT-MUM. Ratio of these decisions applies squarely to the facts of the present case. Accordingly, they set aside the impugned order confirming the payment of a sum of 2,01,087/- under Rule 6 of the Cenvat Credit Rules, 2004 and allow the appeal with consequential relief, if any, in accordance with law. The Miscellaneous Application also stands disposed of.

Decision:- Appeal allowed.

Comment:- The analogy in the case is that the waste products generated during the course of manufacture are not considered as final products and so the payment of a sum equal to 10%/5% of the price of the goods is not required to be made in terms of Rule 6(3) of the Cenvat Credit Rules, 2004.This was based on the landmark decision in the case of Balrampur Chini Mills Ltd.v. Union of India- 2013-TIOL-557-ALL-CX = 2014 (300)E.L.T.372 (All.)

Prepared By-Neelam Jain

Comments

PJ/CASE LAW/2015-16/2677

Post a Comment

Query