Custom, Excise & Service Tax Tribunal
Sahakar Shiromani Vasantrao Kale Ssk ... vs Cce Pune Iii on 27 October, 2017
IN THE CUSTOMS EXCISE & SERVICE TAX APPELLATE TRIBUNAL
WEST ZONAL BENCH AT MUMBAI
Appeal No.
E/86839, 86840, 86843/17
(Arising out Order-in-Appeal No. PUN-SVTAX-000-APP-317 to 327-16-17 dated 06.03.2017 passed by the Commissioner of Central Excise(A), Pune)
For approval and signature:
Honble Shri Raju, Member (Technical)
1. Whether Press Reporters may be allowed to see No
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 No CESTAT (Procedure) Rules, 1982 for publication
in any authoritative report or not?
3. Whether Their Lordships wish to see the fair copy Seen
of the Order?
4. Whether Order is to be circulated to the Departmental Yes
authorities?
Sahakar Shiromani Vasantrao Kale SSK Ltd.
Appellant
Vs.
CCE Pune III
Respondent
Appearance:
Shri V.B. Gaikwad, Advocate for the appellant Shri S.J. Sahu, AC (AR) for the respondent CORAM:
Honble Shri Raju, Member (Technical) Date of hearing : 06.10.2017 Date of decision : 27.10.2017 O R D E R No: ..
Per: Raju These appeals have been filed by Sahakar Shiromani Vasantrao Kale SSK Ltd.
2. Ld. Counsel for the appellants argued that reversal of cenvat credit has been sought invoking Rule 6 of the Cenvat Credit Rules in respect of Pressmud, Bagasse and Compost cleared by them. He pointed out that all these products are waste and refuse of the process of manufacture of finished goods. Ld. Counsel for the appellants relied on the decision of the Tribunal in the case of Shivratna Udyog Ltd. & Ors. vide Order no. A/89563-89568/17/SMB dated 04.08.2017 wherein it has been held that reversal of cenvat credit under Rule 6 of the Cenvat Credit Rules is not required in respect of waste, by-product, refuse generated during the process of manufacture.
3. Ld. AR relies on the impugned order. He pointed that the explanation has been inserted in Rule 6(1) to the effect that the provisions would apply even to non-excisable goods. On that ground he sought to distinguish the decision of Hon'ble Apex Court in DSCL Sugar Ltd. 2015 (322) ELT 769 (SC).
4. I have gone through the rival submissions. I find that identical issue has been decided by the order of Tribunal in Shivratna Udyog Ltd. & Ors. Dated 04.08.2017. In para 4 of the said order, following has been observed:-
4. I have carefully considered the submissions made by both sides. The fact of the case is that the appellants goods in dispute are bagasse, press-mud, boiler ash and compost which are either waste or by-products. The issue is to be decided is whether in terms of Rule 6(3) an amount of 6% is required to be paid on the clearance of such waste/by product. The issue has been considered in various judgments. In the case of Rallies India Ltd. Vs. Union of India 2009 (233) ELT 301 (Bom.) the Hon'ble Bombay High Court has held that the provisions of Rule 57CC which pari materia to Rule 6 of the Cenvat Credit Rules 2004, in case of waste arising during the course of manufacture of final product, Rule 57CC is not applicable. It was also held in the said judgment that liability under Rule 57CC arises only for final product and not for waste the Hon'ble High Court also considered the provisions of Rule 6 of Cenvat Credit Rules 2004. The similar issue was considered in the case of Union of India vs. Hindustan Zinc Ltd. (supra) wherein it was held that the Sulfuric Acid which is generated as a by product recovery of 8% under Rule 6 of Cenvat Credit Rules 2004 is not correct. In view of the above judgments the issue whether Rule 6(3) is applicable in case of removal of non-dutiable waste or by product is settled in favour of the assessee. As regard the submissions made by Ld. ARs that after insertion of explanation in Rule 6(1), even in case of non-excisable goods, the reversal under Rule 6(3) is required. In this regard he referred to the Honble Supreme Court judgment in the case of DSCL Sugar Ltd.(supra). Wherein the Honble Supreme Court has held that in case of non-manufactured/non-excisable goods under Rule 6(3) would not apply and after the amendment in Rule 6(1) by inserting explanation, the ratio of the Honble Supreme Court judgment will not applicable for the period after amendment. On careful consideration of this submission, I find that the issue before the Honble Supreme Court in DSCL Sugar Ltd. was that whether Rule 6(3) is applicable in case of non-excisable goods. However, in the present case all the goods which are cleared without payment of amount under Rule 6(3) are either by product or waste. In case of by product or waste the decision of Jurisdictional High Court of Bombay in the case of Rallies India Ltd.(supra) settled the issue that case of by product or waste cenvat credit cannot be denied. As provided in para 3.7 of Chapter 5 of CBEC Circular which reads as under:
3.7 CENVAT credit is also admissible in respect of the amount of inputs contained in any of the waste, refuse or bye product, Similarly, CENVAT is not to be denied if the inputs are used in any intermediate of the final product even if such intermediate is exempt from payment of duty. The basic idea is that CENVAT credit is admissible so long as the inputs are used in or in relation to the manufacture of final products, and whether directly or indirectly. From the above para, it is clear that if any input is contained in waste by product or goods the cenvat credit shall not be denied. If rule 6(3) is made applicable in these goods this clarification will stand redundant. If legislator has intention even to apply Rule 6(3) on waste or by-product, refuse then either this para should have been amended or omitted. Since this clarification is still in force the Cenvat credit either by way of Rule 6(3) or otherwise cannot be denied. As per my above discussion, I am of the considered view that in case of removal of waste or by-product Rule 6(3) has no application. Accordingly, the impugned orders are set aside. The appeals are allowed.
5. Relying on the said order, appeals are allowed.
(Pronounced in Court on ..............................) (Raju) Member (Technical) //SR
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E/86839, 86840, 86843/17