Custom, Excise & Service Tax Tribunal
M/S Monnet Ispat And Energy Ltd vs C.C.E. & S.T. Raipur on 22 July, 2016
IN THE CUSTOMS, EXCISE AND SERVICE TAX
APPELLATE TRIBUNAL, NEW DELHI
PRINCIPAL BENCH, COURT NO. III
Excise Appeal No. E/55719/2014-Ex[SM]
[Arising out of Order-In-Appeal No. 185/RPR-I/2014 dated 25.08.2014 passed by Commr. (Appeals) Raipur]
For approval and signature:
Hon'ble Mr. S.K. Mohanty, Member (Judicial)
1
Whether Press Reporters may be allowed to see the Order for publication as per Rule 27 of the CESTAT (Procedure) Rules, 1982?
2
Whether it should be released under Rule 27 of the CESTAT (Procedure) Rules, 1982 for publication in any authoritative report or not?
3
Whether Their Lordships wish to see the fair copy of the Order?
4
Whether Order is to be circulated to the Departmental authorities?
M/s Monnet Ispat and Energy Ltd. ...Appellant(s)
Vs.
C.C.E. & S.T. Raipur ...Respondent(s)
Appearance:
None appeared for the Appellant Mr. Dharam Singh (DR) for the Respondent CORAM:
Hon'ble Mr. S.K. Mohanty, Member (Judicial) Date of Hearing/ Decision. 22.07.2016 Final Order No. 52572/2016 Per S. K. Mohanty:
Brief facts of the case are that the appellant is engaged in the manufacture of Silico Manganese and Ferro Chrome falling under Chapter 72 of the Central Excise Tariff Act, 1985. The appellant avails cenvat credit of Central Excise duty paid on the inputs and capital goods used in or in relation to manufacture of the said final product Silico Manganese slag and Ferro Chrome slag come into existence as a residue/ waste product. Taking of cenvat credit on the input and capital goods were disputed by the Central Excise department on the ground that the slag emerged during the course of manufacture of the main final product are exempted from payment of Central Excise duty, and thus, the appellant is required to pay an amount equal to 5% or 6% or 10% of value of the slag in terms of Rule 6(3) of the Cenvat Credit Rules, 2004. The amount confirmed under Rule 6(3) of the Rules read with 11(A) of the Central Excise Act, 1944 was upheld by the Ld. Commissioner (Appeals) vide the impugned order dated 25.08.2014. Hence, the present appeal before this Tribunal.
2. None appeared for the appellant.
3. Sh. Dharam Singh the Ld. AR appearing for the Respondent reiterates the findings recorded in the impugned order.
4. Heard the Ld. AR for the Revenue and examined the records.
5. It is an admitted fact that Silico Manganese slag and Ferro Chrome slag emerge involuntarily during the course of manufacture of the final product. Since, the appellant had no intention to manufacture slag, the same, in my opinion, should not be considered as excisable goods. Since the slag seized to the excisable goods, the question of dutibility or exemption does not arise. Therefore, the embargo created in Rule 6(3) of the Cenvat Credit Rules, 2004 for payment of amount equal to 5%, 6% or 10% of the value of exempted goods has no application in the circumstances of the present case. In this context, I find that the CBEC in Chapter 5 at paragraph 3.7 in the Supplementary Instructions 2005 have clarified that Cenvat credit is admissible in respect of the amount of inputs contained in any of the waste, residue or by-product. Further, I find that this Tribunal in the case of Haryana Steel & Power vs CCE & ST Mysore 2015 (325) ELT 400 (Tri. Bang.) and ISMT Ltd. vs. CCE Pune 2015 (329) ELT 919 (Tri. Mum) have held that slag emerged as by product of waste during manufacture of the main final product should not come within the purview of manufacture of exempted goods, and thus, the requirement of Rule 6(3) of the Rules, will have no application. In view of above, I am of the opinion that confirmation of amount under Rule 6(3) of the Rules by the authorities below is not in conformity with the cenvat statute. Therefore, I set aside the impugned order and allow the appeal in favour of the appellant.
(Dictated and pronounced in open court) (S. K. Mohanty) Member(Judicial) Neha 3 | Page ST/55719/2014-[SM]