Custom, Excise & Service Tax Tribunal
Commissioner Of Central Excise And ... vs M/S. Riga Sugar Company Ltd on 2 May, 2016
IN THE CUSTOMS, EXCISE & SERVICE TAX APPELLATE
TRIBUNAL, KOLKATA
EASTERN ZONAL BENCH: KOLKATA
Appeal No. E/75173/2014
(Arising out of Order-in-Appeal No.375/Pat/CEx./Appeal/2013 dated 29.10.2013 passed by the Commissioner (Appeals),Customs,Central Excise and Service Tax, Patna)
FOR APPROVAL AND SIGNATURE
Honble Shri H.K.Thakur, Member (Technical)
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
Authorative report or not?
3. Whether Their Lordship wishes to see the fair copy
of the Order?
4. Whether Order is to be circulated to the Departmental
Authorities?
Commissioner of Central Excise and Service Tax, Patna
Applicant (s)/Appellant (s)
Vs.
M/s. Riga Sugar Company Ltd.
Respondent (s)
Appearance:
Sri J.Bose, AC(AR) for the appellant (s) Sri Arvind Baheti for the Respondent (s) CORAM:
Honble Shri H.K.Thakur, Member (Technical) Date of Hearing/Decision:02.05.16 Date of Pronouncement: 02.05.16 ORDER NO.FO/A/75335/2016 Per Sri H.K.Thakur
1. This Appeal has been filed by the Revenue against Order-in-Appeal No. 375/Pat/CEx./Appeal/2013 dated 29.10.2013 passed by the Commissioner (Appeals), Patna.
2. Sri J.Bose, AC(AR) appearing on behalf of the Revenue argued that Appellant is using cenvatable inputs in the manufacture of dutiable as well as exempted products (Bagasee, Press mud & Bio-compost). That as per the provisions of Rule 6(3) of Cenvat Credit Rules, 2004 (CCR) Respondent is required to pay an amount equivalent of 5%/8% of the sale value of these exempted products as no separate accounts of inputs with respect to dutiable and exempted goods are maintained by respondent. Ld. AR very strongly argued that the order passed by the First Appellate Authority is not correct and is required to be set aside by restoring the Order-in-Original dated 27.02.2013 passed by the Adjudicating Authority.
3. Sri Arvind Baheti, CA appearing on behalf of the Respondent argued that cenvatable inputs on which credit is taken are not used in the production of Bagasee, Press mud & Bio-compost as these are only waste products that arise during the course of manufacture of sugar. Ld. CA has relied upon the case law of Union of India vs. DSCL Sugar Ltd. [2015(322)E.L.T. 769(S.C)] wherein it has been held by the Apex Court that notwithstanding the amendment carried out in section 2(d) of the Central Excise Act, 1944 in 2008 items like Bagasee cannot be treated to have been manufactured.
4. Heard both sides and perused the case records. The issue involved in the present proceedings is whether Respondent is required to discharge an amount equivalent to 5% / 8% of the value of Bagasee, Press mud & Bio-compost sold by the Respondent. It is observed from paragraph -11 of the Apex Courts decision in the case of Union of India vs. DSCL Sugar Ltd. that provisions of Rule 6 of CCR shall have no application as Bagasee is not a product of manufacture. Provisions of Rule 6(3) of the CCR are applicable only to a situation where exempted as well as dutiable products are manufactured by an assessee out of common inputs and no separate records are maintained. It has been held by the Apex Court that no manufacturing activity is under taken with respect to a product like Bagasee, which is only an agricultural based residue and is not a result of any process of manufacture. The same is true to the products Press mud and Bio-compost. Accordingly Respondent is not liable to pay 5% / 8% of the sale proceeds of these products in the light of law laid down by the Apex Court.
5. Accordingly the Appeal filed by the Revenue is dismissed.
(Operative Portion of the order was pronounced in the open court.) S/d.
(H.K.Thakur) MEMBER(TECHNICAL)
SS
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Appeal No.E/75173/14