2026-VIL-362-CESTAT-AHM-CE
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CENTRAL EXCISE CESTAT Cases

Central Excise - Excisability of waste/residue products - Manufacture of Sugar, Generation of waste/by-products like bio-compost, bagasse, and press mud during the manufacturing process. These waste/by-products were cleared to farmers on consideration - Whether the waste/by-products like bio-compost, bagasse, and press mud generated during the manufacture of sugar can be considered as excisable goods, and whether the appellants are required to reverse proportionate Cenvat credit or pay 5% of their value under Rule 6 of the Cenvat Credit Rules, 2004 – HELD – The bagasse and press mud are inevitable waste/by-products generated during the manufacture of sugar and molasses, and the appellant could not have maintained separate accounts for inputs used in the manufacture of dutiable and exempted goods. Therefore, the amendment in the Finance Act and the Board's circular would not make any difference to the appellant's plea - Bagasse generated during the crushing of sugarcane is not an excisable item and the same is also applicable to press mud as it is an inevitable waste generated during the manufacture of molasses - The Supreme Court, in the case of UOI vs. DSCL Sugar Limited, upheld the judgment of the Allahabad High Court in Balrampur Chini Mills Limited and held that bagasse is only an agricultural waste and residue, and not the result of any manufacturing process, and therefore, it cannot be treated as an excisable item, and the Cenvat Credit Rules have no application - The impugned order is set aside and the appeal is allowed
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