2017 (2) TMI 1255 - AT - Central Excise

CENVAT credit - Blast furnace - N/N. 76/86 dated 10.2.1986 as amended - since the said gas was cleared without payment of duty, an amount equal to 8% of the total price of the BFG recovered from M/s Indorama Cement Ltd. as demand under Rule 57AD of CER, 1944 and Rule 6 of CCR, 2002 - Held that - Identical issue decided in the case of Union of India & Others Versus M/s. Hindustan Zinc Ltd. 2014 (5) TMI 253 - SUPREME COURT , where it was held that The respondents maintained the inventory of zinc concentrate for the production of zinc and we agree with the submission of the respondents that there was no necessity and indeed it is impossible, to maintain separate records for zinc concentrate used in the production of sulphuric acid. - the requirements of 57CC were fully met in the way in which the Respondent was maintaining records and inventory and the mischief of recovery of 8% under Rule 57 CC on exempted sulphuric acid is not attracted - appeal dismissed - decided against Revenue.

Summary

Issues:
1. Duty exemption claim on Blast Furnace Gas (BFG) supplied to another company.
2. Availing CENVAT Credit while supplying BFG without duty payment.
3. Appeal against the Commissioner (Appeals) decision.
4. Cross-objection filed by M/s Ispat Metallics (India) Ltd.

Analysis:

1. The case involved the respondent, M/s Ispat Metallics (India) Ltd., engaged in manufacturing goods falling under Chapter 72 of the Central Excise Tariff Act, 1985. They supplied Blast Furnace Gas (BFG) to M/s Indorama Cement Ltd. without duty payment, claiming exemption under Notification No.76/86. The Revenue demanded an amount equal to 8% of the total price of the BFG under Rule 57AD of Central Excise Rules, 1944, and Rule 6 of Cenvat Credit Rules, 2002. The Commissioner (Appeals) set aside this demand, leading to the Revenue's appeal before the Tribunal.

2. The Revenue's appeal was based on the grounds mentioned in the appeal memorandum, arguing against the exemption claimed by M/s Ispat Metallics (India) Ltd. However, the respondent's counsel relied on a previous Tribunal decision in a similar case and the decision of the Hon'ble Apex Court in the case of Hindustan Zinc Ltd. The Tribunal had previously dismissed the Revenue's appeal in identical circumstances, following the precedent set by the Apex Court.

3. Considering the earlier Tribunal decision and the ratio of the Apex Court's judgment in Hindustan Zinc Ltd., the Tribunal, led by Member Raju, dismissed the Revenue's appeal. The cross-objection filed by M/s Ispat Metallics (India) Ltd. was also disposed of in the same order. The judgment was pronounced in court on 23/2/2017, finalizing the decision in favor of the respondent and upholding the exemption claimed on the supply of Blast Furnace Gas without duty payment.

This detailed analysis outlines the key issues, arguments presented, legal precedents relied upon, and the final decision rendered by the Appellate Tribunal CESTAT MUMBAI in the cited case.