2019 (4) TMI 1415 - AT - Central Excise

CENVAT Credit - exempt goods or not - iron ore fines, generated during the process of manufacture of Sponge Iron and cleared by the appellant - Rule 6 of Cenvat Credit Rules, 2004 - HELD THAT - The issue in the present appeal is covered by the decision of this Tribunal in M/S. JSW STEELS LTD VERSUS COMMISSIONER OF CENTRAL TAX AND CENTRAL EXCISE, BELGAUM 2019 (3) TMI 29 - CESTAT BANGALORE , where it was held that even after the amendment from 01.03.2015, Rule 6 shall not applicable to by-products/waste products produced during the manufacture of dutiable final products. Also, iron ore fines is not a manufactured product, Rule 6 of CCR is not applicable - appeal allowed - decided in favor of appellant.

Summary

Issues:
Whether iron ore fines cleared by the appellant are considered as 'exempted goods' under Rule 6 of Cenvat Credit Rules, 2004.

Analysis:

1. Background and Facts: The appellant is involved in the manufacture of Sponge Iron and avails credit of service tax and duty paid on input services and goods. Iron ore fines are obtained during the manufacturing process but cannot be used in making sponge iron. The Revenue alleges that the appellant has not complied with Rule 6 of Cenvat Credit Rules, leading to a show cause notice demanding payment of duty on exempted goods.

2. Contentions: The appellant argues that Rule 6 does not apply to them, as no cenvatable inputs were used until the stage of obtaining iron ore fines. They assert that iron ore used till that stage is exempt from duty. The appellant also cites various judgments supporting their position.

3. Revenue's Position: The Authorized Representative for the Revenue supports the findings of the impugned order, emphasizing the duty liability on exempted goods.

4. Tribunal's Decision: The Tribunal refers to the case of JSW Steels Ltd vs. CC&CE- Belgaon and concludes that Rule 6 does not apply to by-products or waste products produced during the manufacturing of dutiable final products. The Tribunal also determines that iron ore fines are not a manufactured product, thus Rule 6 of Cenvat Credit Rules does not apply in this case. Consequently, the Tribunal sets aside the impugned order and allows the appeal of the appellant.

In conclusion, the Tribunal rules in favor of the appellant, stating that iron ore fines are not considered manufactured products and hence exempt from the application of Rule 6 of Cenvat Credit Rules, 2004. The judgment provides clarity on the issue and sets a precedent based on established legal principles and previous decisions.