Molasses produced in sugar factory is Scrap exigible to TCS

ITAT ASR in Nawanshahar Co-op. Sugar Mills Ltd; I.T.A. Nos. 311, 312, 313 & 314(Asr)/2012 upheld the decision of CIT A quated below:

"In the process of manufacture of sugar, molasses is left behind after the sugar has crystallized from the syrup. Molasses cannot be used directly. Till some time ago, disposal of molasses used to be a big problem, as observed by the Hon’ble Apex Court in the case of Atma Ram (Died) Thru LRs vs State of Haryana (2008) 2 SCC 568. Hence, it was certainly waste and scrap earlier. However, with the development of technology, molasses are being produced in large quantities for producing alcohol and ethanol. However, with the development of technology, molasses are being produced in large quantities for producing alcohol and ethanol. However, in my opinion, merely molasses have found use for producing commercially
valuable products, its nature as a waste or scrap will not change. Molasses is essentially a leftover from the process of manufacture of sugar. It cannot be used directly and needs to be processed for extracting alcohol or ethanol from it, or for putting it to any other use. In that sense, it is different from the output of various products from a petrochemical plan processing crude. This plant yields several products like diesel, petrol, kerosene, etc; which can be used directly. Molasses, however, cannot be used directly and is also a leftover from the sugar manufacturing process. Hence, I uphold the view of the AO that molasses was ‘scrap’ as defined in Explanation (b) to section 206C."