per : M. Veeraiyan, Member (T)]. - Heard both sides on the stay petition.

2. The appellant is a manufacturer of sugar and molasses. The molasses when cleared on sale, duty is being paid. Molasses is also being captively consumed during the process of manufacture of dutiable products like denatured spirit and fusel oil and in the manufacture of ethanol and rectified spirit which are exempted products. On the ground that the molasses have been used for manufacture of both dutiable and non-dutiable products, it has been held that Notification No. 67/95 is not applicable in respect of clearances of molasses and duty amounting to Rs. 3,47,23,712/- stands demanded along with interest and equal amount of penalty imposed.

3. Learned advocate for the appellant submits that they have exercised the option under Rule 6(3A) of the CENVAT Credit Rules in respect of exempted goods and accordingly reversed the credit attributable to inputs used in exempted products namely ethanol and rectified spirit. In view of the above, the demand of duty on molasses denying the exemption under Notification No. 67/95 is not justified. In this regard he relies on the following decisions :

Godavari Sugar Mills Ltd. v. Commissioner of Central Excise, Belgaum - 2007 (212) E.L.T. 234 (Tri.-Bang.).

Sakthi Sugars Ltd. v. Commissioner of Central Excise, Salem - 2008 (230) E.L.T. 676 (Tri.-Che.).

4. The learned Addl. Commissioner (AR) fairly submits that facts of the present case are substantially the same as the facts in the case of decisions relied upon by the learned advocate.

5. We have carefully considered the submissions from both sides and perused the records. The Commissioner has categorically held that the appellants have exercised the option under Rule 6(3A) of the CENVAT Credit Rules. It is the case of the appellant that the credit attributable to the exempted products is only Rs. 1,78,261/- which has been reversed periodically at the end of every month. We prima facie agree with the views of the learned advocate that in view of the option having been exercised under Rule 6(3A) of the CENVAT Credit Rules, 2004, the appellant should be extended the benefit of the Notification No. 67/95. Therefore, we hold that the appellants have made out a strong case for waiver of the dues as per the impugned order.

6. In view of the above, there shall be waiver of pre-deposit of dues as per the impugned order and stay of recovery thereof till the disposal of the appeal.