- (1.) We have heard Sri Bharat Ji Agarwal learned senior counsel assisted by Ms. Sanyogita Singh learned counsel for the appellant and Sri Praveen Kumar learned counsel for the department and have also perused the record.
(2.) As the controversy involved in these appeals is identical, the same is being decided by a common judgment and order treating the Central Excise Appeal no.248 of 2009 as the leading case.
(3.) The Central Excise Appeal no.248 of 2009 has been filed by the department against the order of Custom, Excise & Service Tax Appellate Tribunal dated 26.8.2008 by which the tribunal has dismissed the appeal filed by the department. The appeal has been filed proposing the following seven questions of law : "1. Whether the appellate tribunal has committed error of law by not appreciating the fact that no MODVAT credit can be taken in respect of the levy molasses which is used as input for manufacture of country liquor a non-excisable project and are under control of the State Excise Authorities ? 2. Whether the appellate Tribunal failed to appreciate that free sale Molasses is used in manufacture of dutiable final products including denatured spirit and special denatured spirit and exempted products like rectified spirit, Extra Neutral Alcohol and Indian Made Foreign Liquor which is non-excisable commodity and as such it cannot be equated with the use of Levy Molasses used as input exclusively in manufacture of country liquor a different final product ? 3. Whether the appellate tribunal was justified in not drawing a distinction between the use of free sale molasses and levy molasses which are used as input in manufacture of different Final products and further failed to consider that no MODVAT credit on reserve quantity of levy molasses at all admissible to the party as the same is allotted by the State Excise Authorities ? 4. Whether the appellate Tribunal failed to consider and discuss the basic point in issue of MODVAT credit on levy molasses and illegality dismissed the departmental appeal with out recording any reason for not upholding the specific finding of fact and grounds furnished by the departmental ? 5. Whether in the instant case, the appellate tribunal has misapplied and misinterpreted the ratio of its own earlier final order dated 14.8.2000 reported in 2001 (130) ELT 93 (-Del). The relied upon ratio pertains to the case where the assessee were asked by the department to pay an amount equal to 8% of the price second category of final product i.e. Indian Made Foreign Liquor (IMFL) manufactured out of the Rectified Spirit (RS). The tribunal set aside the departmental order and held that 8% of sale price of Rs. i.e. first category of final product was chargeable under erstwhile Rule 57-CC/57-AD of CER, 1944. Thus the relied upon case has no relevance to the instant case ? 6. Whether the Rule 57AD is applicable in respect of the levy molasses which is used by the manufacturer exclusively in the manufacture of country liquor. Country liquor is manufactured out of the quota of molasses allotted by the controlling authority of molasses i.e. Excise Commissioner (U.P). Such quantity of molasses is being allotted to the distillery of the manufacturer which is known as levy molasses on the condition that the entire quantity of molasses shall be used exclusively in the manufacture of country liquor (Deshi Sharab). 7. Whether the credit of input will be available to the manufacturer, if such inputs are exclusively used for manufacture of non-excisable final products. The credit of inputs under Rule 57A of Central Excise Rules, 1944 is available to the manufacturer if such inputs are used in the manufacture of such finished excisable goods only as the Central Government may specify in this behalf by way of notification. The manufacturer's final product namely country liquor is not an excisable product and as such no MODVAT facility will be admissible in respect of levy molasses used in the manufacture of final product which is not an excisable commodity ?";