9911796707
TMI Blog2002 (1) TMI 136X X X X Extracts X X X X X X X X Extracts X X X X ..... f Modvat credit of duty paid on the inputs namely Caustic Soda, Cateletic Ion, Sulphuric Acid, Liquid Oxygen and Wash Oil. During the course of manufacture of iron and steel, various other by-products and intermediate products also emerge. The said products are Burnt Dolomite, Coal Tar and Amonium Sulphate falling under Chapters 25, 27 and 31 of the CETA, 1985. The said products were being cleared by the appellant at nil rate of duty, inasmuch as the same were either chargeable to nil rate of duty or/and exempted from payment of duty. 3. The appellants were issued two show cause notices dt. 3-5-2000 and 6-6-2000 for the periods 1-9-96 to 31-10-99 and 1-11-99 to 29-2-2000 raising demand of duties of Rs. 1,48,43,756.00 (Rupees one cro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... onal penalty. The said order of the Commissioner is impugned before us. 5. Shri K.K. Banerjee, ld. Adv. appearing on behalf of the appellants submits that the appellant is a unit primarily for the manufacture of iron and steel articles thereof from iron ore. The process of manufacture of iron and steel from iron ore is as under :- "Iron Ore is charged in the blast furnace where coke is used as fuel to obtain molten metal in melting shop. The said coke is obtained by the process of carbonization of coal at high temperature in coke oven where coke oven gas is produced. The coke oven gas is pumped out by pump driven by steam. The steam is produced in the Boiler where demineralized water is used. For demineralization of water, the nat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... inputs are Catalytic Ion, Caustic Soda and Sulphuric Acid on which they have availed the benefit of Modvat credit of duty paid on the same. From the flow chart of use of inputs placed on record by the appellants we find that the said inputs are used in demineralization plant and the demineralized water is further used in the manufacture of steam. Steam, so emerged, is captively consumed in coke oven where coal is added and the coke so emerging from the oven is further used along with iron ore in blast furnace. At this stage coke oven gas produced in coke oven is used in by-product plant resulting in emergence of three products Coal Tar, Amonium Sulphate and Burnt Dolomite. The flow chart shows that it is a continuous uninterrupted process a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ons of Rule 57CC will not apply to them, does not impress us inasmuch as a plain reading of Rule 57CC makes it clear that no distinction has been made between the intended final products or the by-products. The said rule requires the assessee to pay an amount equal to 8% of the price of the final products cleared at nil rate of duty even where the inputs have been directly or indirectly used in the manufacture of such final products and even where they are not contained in the said final product. The expression used in the said Rule 57CC that inputs which are used in or in relation to the manufacture of both the categories of final products, i.e. dutiable as well as exempted or attracting nil rate (emphasis provided). The expression in or i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of duty shall not be denied or varied on the ground that part of the inputs is contained in any waste, refuse or by-product arising during the manufacture of the final product is not appropriate inasmuch as it is not the credit originally taken which is being denied to the appellants, but an amount equivalent to 8% of the price of the exempted category of goods is being demanded from them under the provisions of Rule 57CC. 9. The appellants have also referred to the West Zonal Bench's decision in the case of Arti Drugs Ltd. - 2001 (133) E.L.T. 385 (Tri - Mumbai) wherein it has been held that provisions of Rule 57CC(1) of Central Excise Rules, 1944 does not apply to by-product. Inasmuch as the above view taken by a coordinate Bench o ..... X X X X Extracts X X X X X X X X Extracts X X X X
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