Case Law Details
Vithal Corporation Ltd. Vs Commissioner of Customs Excise & Service Tax (CESTAT Mumbai)
CESTAT Mumbai held that bagasse being an agricultural waste/ residue, there could be no manufacturing activity. Accordingly, bagasse is not result of any manufacturing process
Facts- The appellants are engaged in the manufacture and clearance of sugar and molasses and are paying duty on all these final products. They were availing Cenvat credit of excise duty paid on inputs and capital goods and service tax paid on input services used in the manufacture of the final product. During the process of manufacturing sugar & molasses, by-products bagasse, etc. were generated which, as per the appellants, are nothing but waste/residue byproduct/refuse which was also being sold by the appellants.
A show cause notice dated 4.5.2011 was issued to the appellants stating that they are availing the Cenvat credit on inputs, capital goods and input services under the Cenvat Credit Rules and utilizing the same for clearing the final product but neither they are maintaining separate records of inputs and input services used for the manufacture of duty paid goods (sugar and molasses) and for exempted goods generated as required u/r. 6(2) ibid nor they are paying an amount of 5% of the value of exempted goods sold by them as required u/r. 6(3).
Accordingly, a demand was raised for an amount equal to 5% of the value of bagasse sold i.e. Rs.12,37,443/- along with interest and penalty. The Adjudicating Authority confirmed the demand along with interest and equal penalty.
Please become a Premium member. If you are already a Premium member, login here to access the full content.
Author Bio
