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2019-VIL-157-ALH-CE

CENTRAL EXCISE High Court Cases

Central Excise - Rule 6 (1) of CCR, 2004 - Whether the Board Circular No.1027/15/2016-CX dated 25/04/2016, treating Bagasse to be an exempted good for the purpose of reversal of credit of input and input services in terms of Rule 6 of the CCR, 2004 is in consonance with the Central Excise Act and Rules – SCN seeking reversal of CENVAT credit relating to Bagasse which emerges during the process of manufacture of sugar – HELD - in absence of Bagasse being a manufactured final product, the obligation of reversal of CENVAT Credit under Rule 6(1) of the CCR, 2004 is not attracted - the Circular dated 25/04/2016 interpreting Explanation 1 to Rule 6 has provided that Bagasse, dross and skimmings of non-ferrous metal or any such by product of waste, which are non-excisable goods and are cleared for consideration from the factory need to be treated like exempted goods for purpose of reversal of credit of input and input services, in terms of rule 6 of the CCR, 2004. The circular therefore treating Bagasse to be a non-excisable goods, is clearly erroneous, and for this reason also the Circular dated 25/04/2016 is liable to be quashed with regard to Bagasse – Rule 6 of the CCR, 2004 would have no application for reversal of CENVAT Credit in relation to Bagasse. The Circular No. 1027/15/2016-CX, dated 25/04/2016, to the extent that it includes Bagasse under the purview of the reversal of credit of input services in terms of Rule 6 of the CCR, 2004 is quashed - The writ petition is allowed

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