- (1.) Heard Mr. Bharat Ji Agarwal, Senior Advocate, assisted by Mr. Sudeep Kumar, Mr. Asit Srivastava, Mr. J.P. Tripathi, Mr. Rahul Agarwal and Mr. Parv Agarwal, learned Counsel for the petitioners, Mr. Deepak Seth, and Mr. Rajesh Singh Chauhan, learned Counsel for the Central Board of Excise & Customs and Mr. Ashit Kumar Chaturvedi, Mr. Ghaus Beg, learned counsel appearing for the Union of India.
(2.) Through the above captioned writ petitions under Article 226 of the Constitution of India, petitioners challenge the impugned order-in-original passed by the Commissioner, Central Excise & Service Tax, Lucknow.
(3.) Shorn off unnecessary details the facts of the case are as under : The sugar, which is being manufactured, falls under sub-heading No.1701 of 1990 of First Schedule of Central Excise Tariff Act, 1985. The principal raw material of the petitioners' final product, namely, sugar, is the sugarcane, which is purely an agricultural product. During the course of manufacture of sugar, molasses (Sheera) emerges as a by-product, which attracts specific rate of duty under the Tariff Heading 1703 of 1000 of the above Act. Admittedly, the Central Excise Duty on sugar, molasses and industrial alcohol is paid by the petitioners on their clearances from the factory, as per procedure prescribed under the Central Excise Rules, 2002. In the process of manufacture of sugar, sugarcane is crushed, its juice is extracted and 'Bagasse' emerges as residue/waste of the sugarcane, which is said to be neither a manufactured product nor is a final product of the sugar industry. The waste of sugarcane, namely, Bagasse, so generated is mainly used as fuel in the factory for manufacture of final products and surplus, if any, is transferred to the sister concerns of the petitioner. The 'bagasse' is classified under sub-heading 2303 2000 of Central Excise Tariff Act, 1985 (5 of 198) as 'Beet-Pulp', 'bagasse' and other waste of sugar manufacture' with NIL rate of duty.;