JUDGMENT :

A.K. Sikri, J.

1. The Respondent (hereinafter referred to as the "Assessee") had two units, one is for the manufacture of sugar and molasses and the other for distilling of denatured spirit, which is dutiable product and rectified spirit, which is non-dutiable product. The Assessee had applied for grant of single licence for both the units as the distilling unit was using molasses manufactured by sugar unit, as inputs, for the manufacture of dutiable and non-dutiable products i.e. denatured spirit and rectified spirit respectively and also because of the reason both these units were located in the same premises. This request of the Assessee was allowed and the Assessee was granted the single licence.

2. In the present case, we are concerned with the CENVAT Credit which was earned by the Assessee in terms of CENVAT Credit Rules, 2001 which were in existence. These Rules were superseded by new Rules, namely, CENVAT Credit Rules, 2002 (hereinafter referred to as the "Rules, 2002").

3. It would be relevant to point out here that under the CENVAT Credit Rules, 2001, the Assessee was also paying duty @ 8% of the value of the exempted goods cleared by it in lieu of the CENVAT Credi