Per V.K. Agrawal : The issue involved in this appeal, filed by the revenue, is whether respondents have to deposit an amount equal to eight per cent of the price of bagasse cleared by them under the provisions of Rule 57CC of the Central Excise Rules, 1944.

2. Shri Virag Gupta, learned D.R., submitted that M/s. Shakumbari Sugar Allied Industries Ltd. manufacture sugar and molasses; that besides these two products, they were also producing bagasse and pressmud which attract nil rate of excise duty; that the Assistant Commissioner under Order-in-Original No. 26/99 dated 7.4.1999 confirmed the demand of Rs. 21,691/- on the ground that the goods attracting nil rate of duty are being cleared after availing the Modvat Credit of the duty paid on inputs and accordingly provisions of Rule 57CC of the Central Excise Rules are attracted and the respondents are required to pay the amount equal to eight per cent of the price of the goods at nil rate of duty; that, however, the Assistant Commissioner did not confirm the demand in respect of bagasse on the ground that the bagasse is manufactured at the first stage of manufacturing of sugar; that juice is extracted by crushing the cane and no modvatable inputs are used at that stage; that the Commissioner (Appeals) also, under the impugned order, rejected the appeal filed by the revenue relying upon the decisions of the Tribunal in the case of Kisan Sahkari Chini Mills Ltd., 2000 (39) RLT 516 (CEGAT)=2001 (116) ELT 470 (Tri) and Rudra Billas Kisan Sahkari Chini Mills Ltd., 2000 (40) RUT 322 (Tri). The learned D.R., further, mentioned that the manufacture of sugar, right from the stage of raw-material to the end product, is wholly integrated process which cannot be segregated in different stages; that the use of the inputs is, as a whole, in the manufacture of end product; that bagasse finds a specific mention under heading No. 23.01 of the Schedule to the Central Excise Tariff Act and as such provisions of Rule 57CC would be attracted.

3. Countering the arguments, Shri Rajesh Chhibber, learned Advocate, submitted that bagasse is not a finished product in respect of which the inputs are used; that bagasse is a waste arising in the course of manufacture of sugar and the provisions of Rule 57D of the Central Excise Rules would apply.

4. We have considered the submissions of both the sides. Rule 57CC of the Central Excise Rules applies only in those cases where a manufacturer is engaged in the manufacture of any final product, which is chargeable to duty as well as any other final product, which is exempted from the whole of the duty of excise or is chargeable to nil rate of duty. Bagasse is obtained by the respondents in the course of manufacture of sugar out of cane sugar. Bagasse may find a mention in the Schedule to the Central Excise Tariff Act, but it has not become a final product merely on the fact that it is mentioned in the Tariff. This is nothing but a waste obtained during the manufacture of sugar. The provisions of Rules 57D (1) of the Central Excise Rules clearly provides that credit of duty shall not be denied or varied on the ground that part of the inputs is contained in any waste, refuse or by-product arising during the manufacture of the final product. As waste cannot be regarded as a final product, provisions of Rule 57CC are not applicable. This was the view held by the Tribunal in the case of Rudra Billas Kisan Sahkari Chini Mills Ltd. (supra). We, therefore, find no infirmity in the impugned order and reject the appeal filed by the revenue.