M/S.Gobind Sugar Mills Ltd vs Cce, Lucknow

[Arising out of Order-in-225-CE/LKO/2012 dated 30.04.2012 passed by the Commissioner (A), Central Excise, Lucknow].]

For approval and signature:

HONBLE MR. S.K. MOHANTY, 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.Gobind Sugar Mills Ltd. Appellant

Vs.

CCE, Lucknow  Respondent

Present for the Appellant : Shri Rajesh Chhibber, Advocate

Present for the Respondent: Shri R.K. Gupta, D.R.

Coram: HONBLE MR. S.K. MOHANTY, MEMBER (JUDICIAL)

Date of Hearing/Decision: 25.08.2015

Final ORDER NO. 54096/2015

PER: S.K. MOHANTY

The appellant is engaged in the manufacture of Sugar falling under Chapter 17 of the Central Excise Tariff Act, 1985. During the course of manufacture of Sugar, a by-product namely, bagasse is emerged, which is cleared as waste from the appellants factory. During the period May to July 2010, the Central Excise Department entertained the view that bagasse being an excisable commodity and is exempted from payment of Central Excise duty, the removal of the same from the factory would attract the embargo of Rule 6 (3) of the Cenvat Credit Rules, 2004. The proceedings initiated in this regard culminated in the adjudication order wherein demand of Rs.9068.00 attributable to removal of the waste product i.e. bagasse was confirmed against the appellant. In appeal against the adjudication order, the ld. Commissioner (Appeals) has upheld the demand and dropped the penalty imposed in the adjudication order. Confirmation of the demand is the subject matter of the present dispute before this Tribunal.

2. Shri Rajesh Chhibber, the ld. Advocate appearing for the appellant submits that the case in hand is squarely covered by the judgment of Honble Allahabad High Court in the case of Balrampur Chinni Mills reported in 2014 (300) ELT 372 (All.) and the judgment of Honble Supreme Court in the case of Union of India vs. DSCL Sugar Ltd. reported in 2015 (322) ELT 769 (SC). The principles decided in the said judgments are to the effect that emergent of waste product during manufacture of Sugar is not to be equated with manufacture of exempted goods and, thus, the restrictions/ embargo created in Rule 6 will have no application for confirmation of the cenvat demand.

3. On the contrary, Shri R.K. Gupta, ld. D.R. appearing for the respondent reiterates the findings recorded in the impugned order.

4. Heard both the sides and perused the records.

5. I find that the dispute involved in the present case is squarely covered by the judgments cited by the ld. Advocate as referred above. Since emergent of bagasse is to be considered as a waste product and which cannot be equated with the exempted final product, the restrictions imposed in Rule 6 regarding reversal of the amount of exempted goods will have no application and as such the action on the part of the authorities below in confirming the cenvat demand on the appellant is not legal and proper. Therefore, considering the judgment referred above, I set aside the impugned order and allow the appeal in favour of the appellant.

(Dictated and pronounced in the open Court)

(S.K. MOHANTY)

MEMBER (JUDICIAL)

Anita

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0 3 E/2398/2012 EX. [SM]