The Central Board of Excise and Customs (CBEC) has withdrawn a circular on levy of excise duty on bagasse, dross and other similar by-products following a court ruling that such wastes are not manufactured products.
The CBEC had through various circulars between 2009 and 2014 made bagasse (the dry pulpy residue left after the extraction of juice from sugar cane) and other such by-products including dross and skimming of aluminium, zinc and other non-ferrous metals excisable.
However, the Supreme Court in a case filed by DSCL Sugar had ruled that "bagasse is not a manufactured product," CBEC said in an order.
"The Judgement applies to both periods, before and after the insertion of explanation in Section 2(d) of the Central Excise Act, 1944 by the Finance Act, 2008," it said.
Also, the Bombay High Court in a petition by Hindalco Industries has come to "similar conclusion in relation to dross and skimming of aluminium, zinc or other non-ferrous metal."
"In the light of the judgments, circulars of the Board on the subject... Have become non-est and are hereby rescinded," CBEC said.
Cases kept in Call Book may be taken out and adjudicated, it told all Principal Chief Commissioners of Central Excise and Service Tax.
The Call book cases are those cases, which can not be adjudicated immediately due to certain specified reasons and adjudication is to be kept in abeyance by transferring such cases to call book.
"Consequently, 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," CBEC added.
In a separate circular, CBEC said cases can be taken out of Call Book and adjudicated where issue has been decided by a higher court.
Also, cases can be taken out of Call Book if the Board has issued new instruction or circular clarifying the issue involved, subsequent to issue of the order to transfer the case to the Call Book.
"A separate direction to take such cases out of the Call Book should not be awaited from the Board," CBEC said adding the clarification applied to cases involving Central Excise duty, customs duty and service tax.
Previously CBEC had instructed to transfer cases where the department has gone in appeal to the appropriate authority or an injuntion isued by a court, to the Call Book.
Also, cases where audit objections are contests or cases where the board has specifically ordered the same to be kept pending and cases referred to Settlement Commission should also be transfered to Call Book.
