Commissioner Of Central Excise, ... vs Bilagi Sugar Mill Ltd

[Arising out of Order-in-Appeal No. BGM-EXCUS-000-DIVD-JC-APP-HAB-013-15 dated 27/01/2015 passed by the Commissioner of Central Excise (Appeals), Mysore]

For approval and signature:

HON'BLE MRS. ARCHANA WADHWA, JUDICIAL MEMBER HON'BLE MR. B.S.V. MURTHY, TECHNICAL MEMBER

1 Whether Press Reporters may be allowed to see the Order for publication as per Rule 27 of the CESTAT (Procedure) Rules, 1982? No 2 Whether it should be released under Rule 27 of the CESTAT (Procedure) Rules, 1982 for publication in any authoritative report or not? No 3 Whether Their Lordships wish to see the fair copy of the Order? Seen 4 Whether Order is to be circulated to the Departmental authorities? Yes

Commissioner of Central Excise, Customs and Service Tax, Belgaum No. 71, Club Road, Central Excise Building, Belgaum  590 001 Karnataka Appellant(s)

Versus Bilagi Sugar Mill Ltd. Badagandi, Bagalkot Karnataka Respondent(s)

Appearance:

Mr. S. Ila, AR For the Appellant

None For the Respondent

Date of Hearing: 15/06/2015 Date of Decision: 15/06/2015 CORAM:

HON'BLE MRS. ARCHANA WADHWA, JUDICIAL MEMBER HON'BLE MR. B.S.V. MURTHY, TECHNICAL MEMBER

Final Order No. 21419 / 2015

Per: ARCHANA WADHWA

After rejecting the stay petition filed by the Revenue, we proceed to decide the appeal itself as the issue is covered in favour of the respondent. The respondent is a manufacturer of sugar and molasses and bagasse emerges as waste product during the course of manufacture of their final product. The respondent is also availing the cenvat credit of duty paid on various inputs. Revenues contention is that inasmuch as a part of the said inputs relate to the manufacture of bagasse, which is exempted, they are required to pay 6% of the value of the said bagasse, in terms of the provisions of Rule 6(3) Cenvat Credit Rules. Accordingly demand was raised against them and was confirmed by the original adjudicating authority.

2. Commissioner (Appeals) has taken note of a latest decision of the Honble Allahabad High Court in the case of Balrampur Chini Mills Ltd. Vs. UOI [2014 (300) E.L.T. 372 (All.)] vide which, the disputed issue was settled in favour of the assessee and the Boards Circular No. 904/24/2009-CX., dated 28.10.2009 was held to be ultra vires.

3. Revenues only ground of appeal in their memorandum of appeal, apart from reiterating the merits, is that Commissioner (Appeals) is a Departmental Officer and was bound by the Circular. We find no merits in the above stand of the Revenue. Once a Boards Circular has been set aside by the Honble High Court, it is the High Courts decision which is required to be followed by the Department. The Revenues stand that Commissioner (Appeals) being a Departmental Officer, was bound by the Circular issued by the Board and not by the Allahabad High Court, reflects upon the lack of judicial knowledge on the part of the Departmental Officer issuing order-in-review. It is well settled law that the High Court decisions are legally bound on all the jurisdictional officers working in the hierarchy system.

4. We find no merits in the appeal of the Revenue and accordingly the same is rejected.

(Order pronounced in open court)

(B.S.V. MURTHY) TECHNICAL MEMBER (ARCHANA WADHWA) JUDICIAL MEMBER

iss