Case Law Details
Commissioner Vs Shree Khedut Sahakari Khand Udyog Mandli Limited (CESTAT Ahmedabad)
The CESTAT Ahmedabad dismissed two appeals filed by the Revenue and upheld the Commissioner (Appeals)’ orders setting aside demands of Central Excise duty, interest, and penalties raised against a sugar manufacturer for non-reversal of CENVAT credit on clearance of bagasse.
During an audit, the department found that the assessee had cleared bagasse, generated during the manufacture of sugar, without payment of duty and without maintaining statutory records or reflecting its production and clearance in ER-1 returns. The department alleged that the assessee had availed CENVAT credit on common input services used for manufacturing both dutiable and non-dutiable goods but had neither maintained separate accounts nor reversed 6% of the value of bagasse under Rule 6 of the CENVAT Credit Rules, 2004. Consequently, show cause notices were issued demanding reversal of ₹97.61 lakh along with interest and penalty. The adjudicating authority confirmed the demand, but the Commissioner (Appeals) set aside the orders, leading to the Revenue’s appeals before the Tribunal.
The Revenue argued that, following the amendment to Rule 6 with effect from 01.03.2015 and CBEC Circular No. 1027/15/2016-CX, non-excisable goods such as bagasse cleared for consideration were to be treated as exempted goods, requiring reversal of CENVAT credit. It contended that the Commissioner (Appeals) had incorrectly relied on decisions rendered before the Rule 6 amendment.
The assessee submitted that the issue had been settled by the Supreme Court in Indian Sucrose Limited, which held that bagasse is not an excisable product as it is merely waste arising during sugar manufacture and involves no manufacturing process. It further pointed out that, following this judgment, the Board withdrew Circular No. 1027/15/2016-CX through Circular No. 1084/05/2022-CX. The assessee also relied on earlier Tribunal decisions involving the same issue.
The Tribunal agreed with the assessee, observing that the issue was no longer res integra and had been consistently settled by decisions of the CESTAT, the Allahabad High Court, and the Supreme Court. Referring to earlier judicial precedents, it noted that bagasse is an inevitable agricultural waste or residue generated during crushing of sugarcane and is not the result of any manufacturing process. Since Rule 6 applies only where both dutiable and exempted goods are manufactured, the Tribunal held that the Rule has no application to bagasse. It also noted that the Supreme Court in DSCL Sugar Limited held that bagasse is not manufactured goods and, therefore, no excise duty or Rule 6 reversal can arise.
The Tribunal further observed that Circular No. 1027/15/2016-CX had subsequently been withdrawn by Circular No. 1084/05/2022-CX after the Supreme Court held the earlier circular to be unsustainable in law. In view of the settled legal position, the Tribunal held that the demands themselves were unsustainable and, consequently, the penalties also could not survive. It therefore upheld the Commissioner (Appeals)’ orders and dismissed both Revenue appeals.
FULL TEXT OF THE CESTAT AHMEDABAD ORDER
These appeals have been preferred by Revenue against the impugned Orders-in-Appeal dated 30.08.2019 through which the learned Commissioner allowed appeals filed by the Assessee and set-aside the Order-in-Original dated 11.02.2019 passed by the Adjudicating Authority confirming demand of Central Excise duty of Rs. 30,28,338/- and Rs. 67,33,011/- alongwith interest and penalty of 6,73,301/- and Rs. 3,02,824/-respectively.
2. The facts of the case, in brief, are that during audit, it was noticed that the assessee was clearing by-product ‘Bagasse’ falling under tariff item 23032000 of Central Excise Tariff Act, 1985 generated during manufacture of sugar, without payment of duty under commercial Bills/Invoices. They are not maintaining Central Excise statutory accounts about production/generation and clearance of the said product and have also not shown the same in their ER-1 returns. On scrutiny of CENVAT account, it was noticed that they have availed Cenvat Credit of the service tax paid on various input services like Telephone Service, Security service, Maintenance & Repair service, Sales Commission service, Business Auxiliary Service etc., which are used for manufacture of both dutiable as well as not dutiable goods. However, they have not maintained separate accounts for receipt, consumption and inventory of input services meant for use in the manufacture of dutiable final products and exempted goods. The assessee has made clearance of 62455.40 MT of ‘Bagasse’ valued at Rs. 11,22,16,851/- during the period from March-2016 to January-2017. As per clause (1) of Rule 6, sub-rule (3) of Cenvat Credit Rules, 2004 as amended (hereinafter referred to as CCR 2004), a manufacturer, opting not to maintain separate records, shall pay an amount equal to 6% of the value of exempted goods.
2.1 As per department, bagasse, which is non-excisable goods, cleared for a consideration from the factory of the assessee, is required to be treated like exempted goods for the purpose of reversal of credit, in terms of Rule 6 of CCR 2004 with effect from 01.03.2015 read with Circular No. 1027/15/2016-CX dated 25.04.2016. The assessee, alleged to have contravened the provisions of Rule 6(3) of CCR 2004 as they neither maintained separate accounts for use of ‘Input services’ for manufacture of exempted by-product ’bagasse’ or paid the amount equal to 6% of the value these goods, cleared from their factory during March 2016 to June 2017, totally amounting to Rs. 97,61,349/- and did not show production and clearance of ‘Bagasse’ in Central Excise Monthly Return i.e. ER-1 and that the said amount is recoverable under Rule 14 of the CCR 2004. Therefore, Show Cause Notice dated 05.02.2018 (covering period March 2016 to January 2017) and statement of demand dated 04.01.2019 covering period from February 2017 to June 2017, were issued to the appellant demanding reversal of an amount of Rs. 97,61,349/- calculated at the rate of 6% of the value of above mentioned exempted by-product, cleared during above period, under Rule 14 of CCR 2004 alongwith interest and penalty. The Adjudicating Authority confirmed proposal in above two Show Cause Notices whereby he confirmed recovery of above amount alongwith interest and imposed penalty of 10% of confirmed demand amount. Feeling aggrieved with the Orders-in-Original, the assessee preferred appeals before the learned Commissioner (Appeals), who allowed their appeals vide order dated 30.08.2019 by setting-aside both the Orders-in-Original. Aggrieved with the Order-in-Appeal, Revenue has filed two appeals bearing No. E/10258/2020 and E/10259/2020 before the Tribunal.
3. Learned AR for the department submitted that the impugned order is contrary to the facts and circumstances and legal position. Learned Commissioner (Appeals) has passed the impugned order following CESTAT decision in M/s. Shree Narmada Khand Udyog Sahkari Mandali Limited vs. CCE, Vadodara-II in which it was held as follows:-
“6.1 The amended definition of ‘excisable goods’ and ‘manufacture’ have been considered by Hon’ble Supreme Court in DSCL Sugar Limited’s Case (supra). Their Lordships observed as follows:-
“10. In the present case, it could not be pointed out as to whether any process in respect of Bagasse has been specified either in the Section or in the Chapter note. In the absence of thereof this deeming provision cannot be attracted. Otherwise, it is not in dispute that Bagasse is only an agricultural waste and residue, which itself is not the result of any process. Therefore, it cannot be treated as falling within the definition of Section 2(f) of the act and the absence of manufacture, there cannot be any excise duty.
11. Since if not a manufacture, obviously Rule 6 of Cenvat Credit Rules, 2001 shall have no application as rightly held by the High court”
6.2 In view of the above settled position, that since the production of ‘bagasse’ cannot be termed as manufacture as defined by Section 2(f) of the Act, following judicial discipline, I hold that “bagasse” which emerges as a waste/by product, fall outside the scope of Rule 6 of CCR, 2004”.
3.1 He submitted that after the judgment passed by Hon’ble Supreme Court in the case of Union of India vs. DSCL Sugar Limited reported in 2015 (322) ELT 769 (S.C.), all the previous Circulars of the Board on the said subject viz. 904/24/2009-CX dated 28.10.2009, 941/02/2011-CX dated 14.02.2011 and Instruction F. No. 17/02/2009-CX dated 12.11.2014 became non-est and were rescinded by the Board. Thereafter, Circular No. 1027/15/2016-CX dated 25.04.2016 has been issued by the CBEC, New Delhi and consequently, Bagasse, Dross and Skimmings of non-ferrous metal or any such by-product or waste, which are although non-excisable goods but if cleared for a consideration from the factory, need to be treated like exempted goods for the purpose of reversal of credit of input and input services, in terms of Rule 6 of the Cenvat Credit Rules, 2004. Therefore, the said Circular find legal force from the amendment made in Rule 6 of the Cenvat Credit Rules, 2004 with effect from 01.03.2015 where following two explanations inserted in sub-rule (1) of Rule 6 of the CCR, 2004. The same are as follows:-
“Explanation 1. For the purpose of this rule, exempted goods or final products as defined in clauses (d) and (h) of Rule 2 shall include non-excisable goods cleared for a consideration from the factory.
Explanation 2. – Value of non-excisable goods for the purposes of this Rule, shall be the invoice value and where such invoice value is not available, such value shall be determined by using reasonable means consistent with the principles of valuation contained in the Excise Act and the rules made thereunder.”
3.2 Learned AR further submits that the demand confirmed in this case is not only supported by CBIC Circular No. 1027/15/2016-CX dated 25.04.2016 but also finds legal backing from the amendment made in sub-Rule (1) of Rule 6 of the CCR, 2004 with effect from 01.03.2015. Learned Commissioner has erred in relying upon the judgment passed by this Tribunal in the case of M/s. Shree Narmada Khand Udyog Sahkari Mandli Limited vs. CCE, Vadodara-II, which itself relies on the judgment passed by Hon’ble Supreme Court in the case of DSCL Sugar Limited (supra) which is prior to the amendment of Rule 6 of the Cenvat Credit Rules, 2004. Even on going through the judgment passed by the Hon’ble High Court of Judicature at Allahabad, Lucknow Bench in an identical case of M/s. Balrampur Chini Mills Limited, it is observed that the Hon’ble High Court has quashed the Impugned Show Cause Notice as well as the Circular No. 1027/15/2016-CX dated 25.04.2016 issued by the Board. The said Order of the Hon’ble High Court has also been challenged before Hon’ble Supreme Court.
3.3 Learned AR argued that it is a settled legal position that executive Instructions cannot override or supersede Statutory Rules or add something therein, nor the orders can be issued in contravention of the Statutory Rules for the reason that an administrative instruction is not a Statutory Rule nor does it have any force of law. Statutory Rules have full force of law provided, same are not in conflict with the provisions of the Act as held in the case of State of U.P. and Ors. vs. Babu Ram Upadhyaya, AIR 1961 SC 751. Learned AR also submitted that for reversal of credit on Bagasse and such identical products, in terms of Rule 6 of the CCR 2004, Rule 6(1) of the CCR 2004 was amended which is still in force. It cannot be denied in this case that clearance of exempted by-product viz. ‘Bagasse’ was made for consideration by the respondent and accordingly, they were liable to reverse the amount equal to 6% of the value. Even after the adverse judgments passed by the Tribunals and High Court, the said Circular has not been rescinded and the relevant Rules have not been amended. Therefore, the Appellate Authority was required to observe that the demand confirmed in this case was backed by amendments to Rule 6 of the CCR 2004, which are still in force. He was also required to observe that the decision relied upon by the appellant has not been accepted on merits by the Department. Further, Circular No. 1027/15/2016-CX dated 25.04.2016 has been issued by the CBEC, on the basis of the said amendments in Rule 6 of the CCR 2004 to deal with the situation which arose after the judgment of the Hon’ble Supreme Court in the case of M/s. DSCL Sugar Limited (supra).
4. Per contra learned Counsel for the respondents submitted that Hon’ble Supreme Court in UOI & Ors vs. M/s. Indian Sucrose Limited – 2022 (7) TMI 353 (SC) has held that ‘Bagasse’ is not an excisable product being a waste arising during the manufacture of sugar. As no manufacturing process is involved in the emergence of Bagasse, Rule 6(3) of the Cenvat Credit Rules, 2004 has no application. Following the above judgment, CBIC has withdrawn their Circular No. 1027/15/2016-CX dated 25.04.2016 vide Circular No. 1084/05/2022-CX dated 07.07.2022, thereby accepting the Hon’ble Supreme Court’s judgment in M/s. Indian Sucrose Limited (supra).
4.2 Learned Counsel also relied on Final Order No. 10836/2025 dated 07.10.2025 in the case of Shree Khedut Sahakari Khand Udyog Mandali Limited, Baben, Bardoli, Dist. Surat and Final Order No. 10068/2026 dated 20.01.2026 in the case of Shree Khedut Sahakari Khand Udyog Mandali Limited, Pandvai, Bharuch involving same issue where it has been held by the Tribunal that the stand of the department that ‘Bagasse’ is an exempted item, no more holds good as it is not a ‘manufactured’ item. In view of the above legal position the impugned order passed by learned Commissioner (Appeals) is liable to be upheld whereas the appeal of the Revenue is liable to be dismissed.
5. We have heard both sides.
5.1 We agree with the learned Counsel for the respondent-assessee that the issue involved in the present appeals is no more res-integra as the issue is well settled in favour of the assessee in view of various judgments and orders pronounced by CESTAT Delhi, Hon’ble Allahabad High Court and Hon’ble Supreme Court.
5.2 In Bajaj Hindustan Limited vs. Commissioner of Central Excise, Meerut-I reported at 2013 (290) ELT 251 (Tri. Del.) – the CESTAT held that bagasse emerges in the course of crushing of sugarcane and press mud emerges during the course of manufacture of molasses as an inevitable product. Thus, keeping in mind that the appellant (of that case, just like in the present case) is engaged in manufacture 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 accounts for inputs for production of excisable items sugar and molasses and exempted items i.e. bagasse and press mud. Thus, the amendment in Finance Act, and the board’s circular would not make any difference so far as the plea of assessee is concerned. The Tribunal further observed that otherwise also, it may be noted that Hon’ble Allahabad High Court vide its judgement dated 18.05.2022 in a bunch of Writ Petition including Writ Petition No. 11791 (M.B.) of 2010 titled Balarampur Chinni Mills & Ors vs. Union of India & Ors., has held that bagasse generated in the course of crushing of sugarcane is not ‘excisable item’ notwithstanding the amendment of section 2(d) of Central Excise Act, 1944 vide Finance Act, 2008 which became operative with effect from 10.05.2008. Vide aforesaid judgment, Hon’ble Allahabad High Court has also quashed the Board’s Circular referred to by the learned AR. Since press-mud is also an inevitable waste generated during manufacture of molasses, the ratio of judgement of Allahabad High Court is squarely applicable in respect of ‘press mud’ which is the subject matter in these appeals.
5.3 In Balrampur Chini Mills Limited vs. Union of India & Ors. – 2014 (300) ELT 372 (All.) –Hon’ble Allahabad High Court has held that for applicability of Rule 6, manufacture of ‘dutiable goods’ and manufacture of ‘exempted goods’ are conditions precedent. The relevant paragraphs of the judgment are reproduced hereunder:-
“21. In the instant case ‘sugar’ is the final product and molasses is an intermediary product or by-product, therefore, for applicability of Rule 6, the manufacture of dutiable goods and manufacture of exempted goods are conditions precedent. Since waste is never manufactured and it only emerges in the process of manufacture of final product, Rule is not applicable to bagasse which is admittedly a waste, which emerges from the crushing of sugarcane for the manufacture of final product, namely, sugar.
22. The law is well settled that ‘bagasse’ generated from the crushing of the sugarcane is neither manufactured goods nor manufactured final product, but it is a residue/waste. The Apex Court while dismissing the Civil Appeal preferred by the department in the case of CCE v. Shakumbhari Sugar & Allied Industries Limited [2005 (189) E.L.T. A62 (S.C.)], uphold the findings recorded by the Tribunal in the case of CCE v. Shakumbhari Sugar and Allied Industries Limited [2004 (176) E.L.T. 819 (Tribunal)], whereby it has been held that the ‘Bagasse’ obtained during the course of manufacture of sugar out of sugarcane may find an entry in Schedule to the Central Excise Tariff, but it does not become a final product merely on such entry. Such ‘bagasse’ is nothing but a waste obtained during manufacture of sugar. Waste cannot be regarded as a final product exempt from duty for invoking provisions of Rule 57CC of Central Excise Rules, 1944.
23. The said finding has also been followed in the cases of Central Excise Commissioner Mahalakshmi Sugar Mills and Commissioner Central Excise, Meerut v. U.P. State Sugar Corporation and held that the Bagasse and press mud are not final products of the manufacture. Accordingly, recovery of 8% amount of the waste Bagasse and press mud cleared by the said sugar company was held to be not justified.
24. The Hon’ble Apex Court while dismissing the Civil Appeal No. 2791 of 2005 preferred by the department vide judgment and order dated 21-7-2010, upheld the findings recorded by the Tribunal that reversal of 8% under Rule 57CC is not applicable as ‘Bagasse’ is not a final product, but it is a waste. It is worthwhile to mention here that in the judgment dated 22-11-2004 of Tribunal, it was specifically referred in para 2 that the appeal filed by the Commissioner, Central Excise in the case of CCE M/s. Kicha Sugar Co. Limited was dismissed by Hon’ble Supreme Court on 20-2-2004.
25. As held by the Apex Court, bagasse is not a manufactured goods and it is never manufactured, but it only emerges in the process of final product, namely, sugar. Bagasse being not a manufactured goods and being a waste, hence Rules 6(2) and 6(3) are not applicable.
26. Section 2(d), as amended by Finance Act, 2008, w.e.f. 13-5-2008, is reproduced as under :-
“excisable goods” means goods specified in the First Schedule and the Second Schedule to the Central Excise Tariff Act, 1985 (5 of 1986) as being subject to a duty of excise and includes salt;
Explanation. – For the purposes of this clause, “goods” includes any article, material or substance which is capable of being bought and sold for a consideration and such goods shall be deemed to be marketable.
So far as the addition of Explanation to Section 2(d), it only refers to the goods which is capable of being bought and sold shall be deemed to be marketable. Earlier also, bagasse was being bought and sold for a consideration and even after the amendment in 2008 it is being bought and sold for a consideration. Hence, it was marketable earlier also and no difference has been made about the marketability of bagasse on account of addition of explanation to Section 2(d) of Central Excise Act inasmuch as it does not cease to be waste and it does not become a manufactured final product for the purposes of Rule 6 of Cenvat Credit Rules.
27. Rule 6 of Cenvat Credit Rules, 2004 is equivalent and analogous to Rule 57CC of Central Excise Rules, which has been interpreted by the Bombay High Court in the case of Rallis India Ltd. Union of India – 2009 (233) E.L.T. 301. Para 2 of the judgment refers to Rule 57CC which is now equivalent to Rule 6 of the Cenvat Credit Rules, 2004, which are in respect of both the period, as mentioned in paragraphs 13 and 14 of the judgment. Paragraphs 25, 26 and 28 refer to the waste which is not final product. Hence, neither Rule 57CC nor Rule 6(2) is applicable.
28. In the case of Commissioner, Central Excise Gas Authority of India Ltd. – 2008 (232) E.L.T. 7, Hon’ble Apex Court has held that rules denying benefit of Modvat credit can only be in respect of final products and since the commodity mentioned in the show cause notice was not final product, hence the benefit of the Modvat credit cannot be denied.
29. Thus, it is not in dispute that the bagasse is an agricultural waste of sugarcane, though marketable product, but the duty cannot be imposed as it does not involve any manufacturing activity simply by adding an explanation under Section 2(d) of the Central Excise Act, 1944, whereby the definition of ‘goods’ has been defined, will not make bagasse, which, as stated hereinabove, is an agricultural waste to be a dutiable item and the Chief Commissioner vide Circular dated 3-10-2009 nullified the judgment and order dated 21-7-2010 rendered in Civil Appeal No. 2791 of 2005.
30. Bagasse is classified under sub-heading 2303 20 00 of Central Excise Tariff Act. In view of the judgment of Apex Court in Civil Appeal No. 2791 of 2005, Commissioner of Central Excise Balrampur Chini Mills, Gonda, decided on 21-7-2010, the Circular of the Chief Commissioner, Central Excise, Lucknow as well as Circular of Central Board of Excise and Customs are liable to be quashed which is the basis for issuing the demand.
31. In the impugned notice dated 27-9-2010, it has been mentioned that as per Rule 6 of the Cenvat credit is availed on the inputs which are used in the manufacture of both dutiable and final products, then an amount equal to 10% (upto 6th July, 2009) or 5% (w.e.f. 7-7-2009) of the sale value of exempted final products is required to be paid. Therefore, neither the penalty nor the interest can be charged from the petitioners, in view of the fact that the petitioners are not liable to duty either by payment or by reversal in respect of bagasse sold by the petitioner. As the petitioners have paid the entire duty and interest under protest, the entire deposited amount shall return to them.
32. In view of above discussion, all the writ petitions are allowed and impugned Circular dated 28-10-2009, issued by the Central Board of Excise and Customs, the Circular dated 3-10-2009, issued by the Central Excise, U.P., Lucknow and demand notice dated 24/27-9-2010, issued by the Joint Commissioner, Customs Central Excise and Service Tax are hereby quashed. As some of the petitioners deposited the entire duty and interest under protest, it should be returned to them, within a maximum period of four weeks, from the date of presentation of a certified copy of this order.”
5.4 The department has challenged the findings of Hon’ble Allahabad High Court in Balrampur Chini Mills Limited vs. Union of India & Ors. (supra) by filing appeal in UOI vs. DSCL Sugar Limited – 2015 (322) ELT 769 (SC) which was dismissed by Hon’ble Supreme Court. The Hon’ble Supreme Court has held that in the present case it could not be pointed out as to whether any process in respect of bagasse has been specified either in the Section or in the Chapter note. In the absence thereof, this deeming provision cannot be attracted. Otherwise, it is not in dispute that Bagasse is only an agricultural waste and residue, which itself is not the result of any process. Therefore, it cannot be treated as falling within the definition of Section 2(f) of the Act and in the absence of manufacture, there cannot be any excise duty. Since it is not a manufacture, obviously Rule 6 of the Cenvat Credit Rules, 2004 shall have no application as rightly held by the High Court.
5.5 It is pertinent to mention here that by issuing Circular No. 1084/05/2022-CX dated 07.07.2022, the Circular No. 1027/15/2016-CX dated 25.04.2016 has been withdrawn by the Board. The relevant provisions of the above mentioned Circular are reproduced below:-
Subject: Excisability of waste/ residue arising during the process of manufacture Withdrawal of Circular No. 1027/15/2016-CX dated 25.04.2016-Reg.
Excisability of bagasse and similar other by-products or waste arising during the course of manufacture of an excisable product has been brought to the attention of the Board.
2. It may be recalled that rule 6 of the CENVAT Credit Rules, 2004 was amended with effect from 1.03.2015 by inserting Explanation 1 and 2 in sub-rule (1) of rule 6, which provides that exempted goods or final product shall include non-excisable goods cleared for consideration from the factory.
3. Accordingly, Circular No. 1027/15/2016-CX dated 25.04.2016 was issued highlighting that Bagasse, Dross and Skimmings of non-ferrous metals or any such byproduct or waste, which are non-excisable goods and are cleared for a consideration from the factory need to be treated like exempted goods for the purpose of reversal of credit of input and input services, in terms of rule 6 of the CENVAT Credit Rules, 2004. This circular was issued in the background of judgement of the Hon’ble Supreme Court in the case of Union of India Vs. M/s. DSCL Sugar Ltd [2015 (322) E.L.T. 769 (S.C.)] holding that Bagasse is only an agricultural waste and residue and it is not a result of any process which can be termed as manufacture’, Similar conclusion was also drawn by the Hon’ble High Court of Bombay in the case of M/s Hindalco Industries Ltd. Vs. Union of India (2015 (315) E.L.T.10 (Bom.)] in relation to dross and skimming of aluminium, zinc or other nonferrous metals.
4. The issue again came before the Hon’ble Supreme court in the case of Union of India Vs. M/s. Indian Sucrose Limited [SLP (C) No. 1700/2021], wherein the Hon’ble Supreme Court vide its judgement dated 04.03.2022, referred to its observations in the Union of India vs. M/s. DSCL Sugar ltd & Ors. (supra) holding that Bagasse is non-excisable to which the CENVAT Credit Rules have no application, and held that the Circular dated 25.04.2016 is unsustainable in law.
5. In light of the above judgement, Circular No. 1027/15/2016-CX dated 25.04.2016 has become non-est and is hereby rescinded. Cases kept in Call Book on the above issue, if any, may be taken out and adjudicated in light of the law decided by the Apex Court.
6. Difficulty experienced, if any, in implementing the circular should be brought to the notice of the Board.
5.6 In view of above judgment/ orders, the issue raised in these appeals is finally settled in favour of the assessee. Therefore, in the light of law laid down by the Hon’ble Allahabad High Court in Balrampur Chini Mills Limited vs. Union of India & Ors (supra) and by Hon’ble Supreme Court in UOI vs. DSCL Sugar Limited (supra), and in view of the Circular No. 1084/05/2022-CX dated 07.07.2022, the impugned orders passed by learned Commissioner (Appeals) are not required to be interfered with. Since the demands itself are not sustained, the penalty imposed on the assessee also cannot be sustained. Therefore, the appeals filed by Revenue are liable to be rejected and the impugned orders passed by learned Commissioner (Appeals) are liable to be upheld.
6. Consequently, the appeals filed by Revenue are dismissed. The impugned orders passed by learned Commissioner (Appeals) are upheld.
(Order pronounced in the open court 17.06.2026)
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