Custom, Excise & Service Tax Tribunal
M/S. Hariyana Steel And Power vs Commissioner Of Central Excise, ... on 19 June, 2015
CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL SOUTH ZONAL BENCH BANGALORE Appeal(s) Involved: E/473/2012-SM, E/474/2012-SM [Arising out of Order-in-Appeal No. 34/2012 dated 24/01/2012 passed by the Commissioner of Central Excise (Appeals), Mangalore.] For approval and signature: HON'BLE SMT. ARCHANA WADHWA, JUDICIAL MEMBER 1 Whether Press Reporters may be allowed to see the Order for publication as per Rule 27 of the CESTAT (Procedure) Rules, 1982? No 2 Whether it should be released under Rule 27 of the CESTAT (Procedure) Rules, 1982 for publication in any authoritative report or not? No 3 Whether Their Lordships wish to see the fair copy of the Order? Seen 4 Whether Order is to be circulated to the Departmental authorities? Yes M/s. HARIYANA STEEL AND POWER P.B. NO.25, KANCHANAHALLI VILLAGE, SATHENAHALLI POST H.N.PURA ROAD, HASSAN DIST 573212 Appellant(s) Versus Commissioner of Central Excise, Customs and Service Tax MYSORE S1-S2, VINAYA MARGA, SIDDHARTHA NAGAR, MYSORE - 570011 KARNATAKA Respondent(s)
Appearance:
Mr. B.G.CHIDANANDA URS, CA #520, AMRUTH NIVAS, 7TH MAIN, 13TH CROSS, RMV 11 STAGE, DOLLARS COLONY, BANGALORE - 560094 KARNATAKA For the Appellant Mr. S. Teli, Dy. Commissioner (AR) For the Respondent Date of Hearing: 19/06/2015 Date of Decision: 19/06/2015 CORAM:
HON'BLE SMT. ARCHANA WADHWA, JUDICIAL MEMBER Final Order No. 21390-21391 / 2015 Per : ARCHANA WADHWA Both the appeals are being disposed of by a common order as they arise out of same impugned order passed by the authorities below.
2. As per facts on records, the appellants are engaged in the manufacture of sponge iron falling under Chapter 72 of the Schedule to the Central Excise Tariff Act. During the course of manufacture of their final product, slag comes into existence, which is a by-product or a waste liable to nil rate of duty. Since the said slag is being sold by the appellant for a value, Revenue was of the view that the same are excisable goods, after the amendment in Section 2(d) of the Central Excise Act, and the appellant is required to pay an amount equal to 5%/10% of their value as per Rule 6(3)(i) of CENVAT Credit Rules, 2004. For arriving at the above conclusions, the lower authorities have referred to an addition of Explanation in the provision of Section 2(d) of the Central Excise Act laying down that if for the purpose of this clause, goods include any article, material or substance which is capable of being bought and sold for a consideration and in such case shall be deemed to be marketable. As such, lower authorities by relying upon the said provisions as also to the Boards Circular No.904/24/09-CX dated 28.10.2009, confirmed the demands in the present cases.
3. Learned advocate appearing for the appellant draws my attention to the Honble Bombay High Court decision in the case of Rallis India Ltd.: 2009-TIOL-16-HC-MUM-CX vide which the Larger Bench decision of the Tribunal was set aside by observing that there is no requirement of reversal of 10% of the value of the final exempted by-product in case of use of common inputs, inasmuch as the by-product cannot be held to be excisable goods manufactured by the assessee. To the same effect the Honble Supreme Courts decision in the case of UOI vs. Hindustan Zinc Ltd.: 2014-TIOL-55-SC-CX laying down that Rule 6 of the CENVAT Credit Rules will not apply in case of clearance of exempted by-products. As such, he submits that inasmuch as the slag is admittedly a by-product of sponge iron, the decisions would apply and the Revenue cannot ask for payment of 10% or 5% of the value of the said exempted products.
4. Countering the arguments learned DR submits that the said decisions are not applicable to the facts of the present case inasmuch as the same are for the period prior to amendment in Section 2(d). As such, he supports the impugned orders.
5. After carefully considering the submissions made by both sides, I find that only difference in the facts of the present case and the decisions relied upon by the learned advocate is the addition of Explanation to Section 2(d) of the Central Excise Act, w.e.f 10.5.2008. However, I find that the Boards Circular No.904/24/09-CX dated 28.10.2009 strongly relied upon by the lower authorities stands struck down by the Honble Allahabad High Court in the case of Balrampur Chini Mills Ltd. vs. UOI reported as 2014 (300) E.L.T. 372 (All.). Further, vide a recent decision, the Honble Bombay High Court in the case of Hindalco Industries Ltd.: 2015 (315) E.L.T. 10 (Bom.) has set aside the Larger Bench decision of the Tribunal reported as 2014 (308) E.L.T. 472 (Tri.-LB) and has observed that the amendment in Section 2(d) will not change the scenario inasmuch as the manufacture of waste, refuse, scrap, etc., cannot be considered to be manufactured items in terms of Section 2(f) of the Central Excise Act.
5.1 In view of the above, I am of the opinion that the amendment in Section 2(d) has not changed the scenario. Accordingly, the law declared in the above decisions of the Honble Supreme Court and the Honble Bombay High Court would apply, read with the decisions of the Honble Allahabad High Court. The impugned orders are accordingly set aside and both the appeals are allowed with consequential relief to the appellants.
(Order pronounced in open court) ARCHANA WADHWA JUDICIAL MEMBER rv 4