Commissioner of Central Excise and Service Tax Vs Barmalt Malting India Private Limited (CESTAT Chandigarh)
Material Facts
The respondent is engaged in the manufacture of barley malt and malt extract and avails CENVAT credit under the CENVAT Credit Rules, 2004. During the manufacturing process, waste/residual products such as wet bhoosi, chilka, dundli and malt sprouts arise and are sold in the market.
AG Audit observed that these waste/residual products were cleared at a nil rate of duty during the period from May 2008 to June 2015. Consequently, several show cause notices were issued alleging that the respondent was required to reverse proportionate CENVAT credit or pay an amount under Rule 6(3) of the CENVAT Credit Rules, 2004. The notices alleged that these residual products were excisable or exempted goods within the meaning of Section 2(d) of the Central Excise Act, 1944.
The respondent denied the allegations.
Procedural History
The adjudicating authority, by a common Order-in-Original dated 26.08.2016, dropped the demand of Rs.96,59,837 relating to the period June 2012 to February 2015. It held that the waste/residual products were non-excisable goods and that Rule 6 of the CENVAT Credit Rules, 2004 was not applicable to such waste/residual products prior to 01.03.2015. It also relied upon the Supreme Court’s decision in Union of India Vs DSCL Sugar Ltd.
