#Exempted Goods

CESTAT Chennai ruled that processed milk is an intermediate product, not an exempted final product, so Rule 6 of the CENVAT Credit Rules does not trigger credit reversal. The decision sets aside the tax demand on Lotte India, clarifying that captive consumption of processed milk in confectionery manufacture does not attract CENVAT credit liability.

CESTAT ruled that waste and scrap generated incidentally during manufacturing do not qualify as 'exempted goods' under Rule 6(3) of the CENVAT Credit Rules, 2004. The Tribunal set aside the 6% payment demand, clarifying compliance obligations for manufacturers and job-workers dealing with incidental by-products.

CESTAT Ahmedabad holds that bagasse, generated as agricultural waste during sugar production, cannot be classified as an exempted good under Rule 6 of the Cenvat Credit Rules, 2004, rendering circulars demanding credit reversal unlawful. This clarifies that waste by-products not intentionally manufactured for sale do not trigger input credit reversal obligations, benefiting sugar mills and agro-industries nationwide.