2013 (5) TMI 268

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..... consciously manufactures two products an excisable and the other fully exempted product using common inputs and /or input services. In this case iron ore fine has emerged as an unavoidable and inevitable waste and compliance with the provisions of Rule 6(2) is impossible. The provisions of Rule 6(3)(b) of Cenvat Credit Rules, 2004 become applicable only if the manufacturer consciously manufactures dutiable and exempted final product using common cenvat credit availed inputs and/or input services and does not comply with the provisions sub-rule (2) of Rule 6 of Cenvat Credit Rules, 2004. It would not apply in a case like this when the exempted final product emerges as an unavoidable waste or by-product and compliance with the provisions .....

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..... rovisions of Rule 6(3) of the Cenvat Credit Rules, 2004 would become applicable and in respect of the same an amount equal to 10% of the sale value would be payable. On this basis, after issuance of shown cause notice the Assistant Commissioner vide order in original dated 25.11.2009 confirmed the demand of Rs.1,00,510/- along with interest under rule 6(3) read with Rule 14 of Cenvat Credit Rules, 2004 and imposed penalty of equal amount. On appeal being filed to the Commissioner (Appeals), the Commissioner (Appeals) vide order in appeal dated 6.5.2010 set aside this order in original on the ground that neither emergence of the iron ore fines is an exercisable product nor the GTA service can be said to be commonly used in the manufacture of .....

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..... ponge iron even in this case, if the respondent want, they cannot comply with the provision of Rule 6(2) of Cenvat Credit Rules, 2004. In support of this contention, he relied upon the decision of Hon ble Bombay High Court in the case of Rallis India Ltd. vs. Union of India reported in 2009 (233) ELT 301 (Bom.). He therefore, pleaded that there is no infirmity in the impugned order. 5. I have considered the submission made from both sides and perused the record. In this case, the iron ore fine emerges as an inevitable waste while screening and sieving the iron ore for removal of smaller particles prior to manufacture of sponge iron. The provisions of Rule 6(2) and Rule 6(3) of Cenvat Credit Rules, 2004 are applicable when a manufacturer c .....

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