2017 (11) TMI 334 - AT - Central Excise

Whether the Blast Furnace Gas generated as bi-product during the manufacturing process is leviable for payment of an amount in terms of Rule 57AD of erstwhile CER, 1944/Rule 6(3)(b) of CCR, 2001/2002/2004? Held that - demand of 8% under Rule 6 of Cenvat Credit Rules, 2002/2004 is not applicable, in the light of the Hon ble Apex Court judgement in the case of Hindustan Zinc Ltd. 2014 (5) TMI 253 - SUPREME COURT , where it was held that Payment of 8%/separate accounts not applicable for by-products - appeal dismissed - decided against Revenue.

Summary

Issues:
Whether Blast Furnace Gas generated as a by-product during the manufacturing process is leviable for payment under Rule 57AD of Central Excise Rules, 1944/Rule 6 (3) (b) of Cenvat Credit Rules, 2001/2002/2004.

Analysis:

The appeal was filed by the Revenue against the order-in-appeal passed by the Commissioner (Appeals) concerning the issue of whether Blast Furnace Gas generated as a by-product during the manufacturing process is subject to payment under specific rules. The Revenue, represented by Shri M.R. Melvin, argued the grounds of appeal, while Shri Ramnath Prabhu, representing the respondents, pointed out that a similar appeal by the Revenue in another case had already been dismissed based on a Supreme Court judgment. The Tribunal noted that the issue was no longer res integra as a previous order dated 23/02/2017 had dismissed the Revenue's appeal in a similar case, citing the Supreme Court judgment in the case of Hindustan Zinc Ltd. The Tribunal referred to the specific details of the previous order, highlighting that the demand under Rule 6 of Cenvat Credit Rules, 2002/2004 was not applicable based on the Supreme Court's judgment. Therefore, the Tribunal upheld the impugned order and dismissed the appeal, concluding that the issue was settled based on the previous decision.

In the previous order dated 23/02/2017, the Tribunal detailed the case involving M/s Ispat Metallics (India) Ltd., where Blast Furnace Gas was generated during the manufacturing process and supplied to another entity without duty payment, leading to a demand equal to 8% of the total price of the gas under specific rules. The Commissioner (Appeals) had set aside the demand, prompting the Revenue to appeal. However, the Tribunal, following the earlier decision and the Supreme Court judgment in the case of Hindustan Zinc Ltd., dismissed the Revenue's appeal and disposed of the cross-objection, establishing that the issue was no longer open for consideration. The Tribunal's decision was based on the settled legal position and the applicability of the Supreme Court's ruling in similar cases, leading to the dismissal of the appeal and upholding of the impugned order.