M/S. Bajaj Hindustan Ltd vs C.C.E. Meerut

[Arising out of Order-in-Appeal No.13-CE/MRT-I/2012 dated 13.01.2012 by the Commissioner of Central Excise (Appeals), Meerut-I].

For approval and signature:

Honble Mr Ashok Jindal, Member (Judicial)

1 Whether Press Reporters may be allowed to see the Order for publication as per Rule 27 of the CESTAT (Procedure) Rules, 1982?

2 Whether it should be released under Rule 27 of the CESTAT (Procedure) Rules, 1982 for publication in any authoritative report or not?

3 Whether Their Lordships wish to see the fair copy of the Order?

4 Whether Order is to be circulated to the Departmental authorities?

M/s. Bajaj Hindustan Ltd. .Appellants

Vs.

C.C.E. Meerut .Respondent

Appearance:

Shri P.K. Mittal, Advocate for the Appellants

Shri A.K. Dhawan, DR for the Respondent

CORAM:

Hon'ble Shri Ashok Jindal, Member (Judicial)

Date of Hearing: 19.01.2015

FINAL ORDER NO.50204-50205/2015-EX(SM)

Per Ashok Jindal:

The appellant is manufacturer of sugar and molasses. While manufacturing the said products, the press mud and compost is sold as fertilizer without payment of duty. Revenue has demanded duty at the rate of 5% / 10% of the value of these items as appellant is not maintaining separate account of these inputs / input services to be used in exempted or final products as per rule 6(3) of the Cenvat Credit rules 2004. Therefore, the impugned order has been passed.

2. Ld. Counsel for the appellant submits that in their own case, this Tribunal has held that as press mud and compost are not the final product of the appellant and they are waste, therefore, appellant is not required to pay duty thereon. He also submits that in the case of Sidheshwar SSK Ltd. Vs. C.C.E reported in 2014 (309) E.L.T. 495 (Tri-Mum) Vide order dated 06.05.2014, again this Tribunal has held that appellant is not required to pay a sum equal to 5 % or 10 % of the value of said goods in terms of rule 6(3) of the Cenvat Credit Rules 2004. Therefore, it is prayed that impugned order be set aside.

2. On the other hand the Ld. AR oppose the contention of the Ld. Counsel and submits that in the case of Hindalco Industries Ltd. Vs. UOI reported in 2009 (243) ELT 481 (All.) the Honble High Court has held that as the goods are marketable or deemed to be marketable, therefore, impugned order cannot be given.

3. Heard the parties. Considered the Submissions.

4. As in appellants own case this Tribunal has observed as under:

We have considered the rivals submissions. We find that Bagasse emerges in the course of crushing of sugarcane and the press mud emerges during the courses of manufacture of molasses as an inevitable product. Thus, keeping in mind that the appellant is engaged in manufacturer of sugar and molasses in which process the waste product i.e. Bagasse and press mud are generated, it cannot be said that the appellant possibly could have maintained separate account for inputs for production of excisable items sugar and molasses and exempted items i.e. Bagasse and press mud. Thus, in our view the amendment in Finance Act cited by Sh. Negi, Ld. AR and Board Circular would not make any difference so far as the plea of assessee is concerned. Otherwise also it may be noted that Honble Allahabad High Court vide its judgment dated 18.05.2012 in a bunch of writ petition including Writ Petition No.11791 (M.B. of 2010) titled Balrampur Chinni Mills and Others Vs. Union of India and others has held that Bagasse generated in the course of crushing of sugarcane is not excisable item notwithstanding the amendment of Section 2(d) of the Central Excise Act, 1944 vide Finance Act, 2008 which became operative w.e.f. 13.05.2008. Vide aforesaid judgment Honble Allahabad High Court has also quashed the board circular referred to by Ld. AR. Since press mud is also an inevitable waste generated during manufacturing of molasses the ratio of the judgment of Allahabad High Court is squarely applicable in respect of press mud. Thus, we are of the considered view that Bagasse and press mud being waste product those cannot be termed as excisable goods so as to attract the provision of Rule 6(2) and Rule 6(3) of the Cenvat Credit Rules, 2004.

5. I further find that in the case of Sidheshwar SSK Ltd. (Supra) the same principle has been followed. Further, I find that the case relied upon by the Ld. AR in the case of Hindalco Industries Ltd. (Supra) is a prima facie view of the Honble High Court. But the appellant has relied on final view taken by the Honble High Court of Allahabad in the case of Balrampur Chinni Mills Ltd. Vs. UOI & Ors. reported in 2014 (300) E.L.T. 372 (All.). Therefore, I hold that appellant is not required to pay an amount equivalent to 5% or 10 % of the value of the goods.

6. In these circumstances, impugned order is set aside. Appeals are allowed with consequential relief if any.

(Dictated and pronounced in the open court)

(Ashok Jindal) Member (Judicial)

Bhanu

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E/1536 & 1537/2012-EX(SM)