Custom, Excise & Service Tax Tribunal
M/S. Vsl Steels Ltd vs Commissioner Of Central Excise, ... on 3 January, 2017
CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL SOUTH ZONAL BENCH BANGALORE Appeal(s) Involved: E/21056/2014-SM, E/22156/2014-SM, E/1789/2012-SM [Arising out of Order-in-Appeal No. 707/2013 dated 26/12/2013 passed by Commissioner of Central Excise and Service Tax , BANGALORE-I( Appeal) ] [Arising out of Order-in-Appeal No. 216-217/2014 dated 24/04/2014 passed by Commissioner of Central Excise , BANGALORE ] [Arising out of Order-in-Appeal No. 104/2012 dated 27/04/2012 passed by Commissioner of Central Excise , BANGALORE ] M/s. VSL Steels Ltd Paramenahalli Village, Hiriyur Taluk, CHITRADURGA - 00 KARNATAKA Appellant(s) Versus Commissioner of Central Excise, Service Tax And Customs Bangalore-iv Office of the Commissioner of Central Excise & Service Tax Bangalore-IV Commissionerate, 59, HMT Bhavan, Bellary Road BANGALORE - 560032 KARNATAKA Respondent(s)
Appearance:
Mr. Prakash, Advocate B.G.CHIDANANDA URS #520, AMRUTH NIVAS, 7TH MAIN, 13TH CROSS, RMV 11 STAGE, DOLLARS COLONY, BANGALORE - 560094 KARNATAKA For the Appellant Smt. Ezhil Mathi, AR For the Respondent Date of Hearing: 03/01/2017 Date of Decision: 03/01/2017 CORAM:
HON'BLE SHRI S.S GARG, JUDICIAL MEMBER Final Order No. 20014-20016 / 2017 Per : S.S GARG The appellants have filed three appeals against different impugned order for different period. Since the issue involved in all the three appeals is identical, therefore all the three appeals are being disposed of by this common order. For the sake of convenience, the facts of the case from appeal No. E/22156/2014 is taken. The details of the appeals are as under: Appeal No. Period Demand E/21056/2014 March to October 2010 Rs.1,75,083/-
E/22156/2014 March 2011 to March 2012 Rs.1,33,977/-
E/1789/2012 May 2008 to February 2010 Rs.7,01,116/-
2. Briefly the facts of the case are that the appellants are engaged in the manufacture of pig iron, kull granulated slag and ungranulated slag falling under Chapter Subheading 72011000, 72041000 and 26180000 and 26190090 respectively of Central Excise Tariff Act, 1985. It was noticed that they had manufactured and cleared 4128.66 MT of ungranulated slag valued at Rs.26,79,552/- during the period from March 2011 to March 2012 without payment of duty as per Notification No.4/2006-CE dated 1.3.2006 as amended. During the budget 2008, an amendment was brought in the definition of excisable goods and as a consequence of which it included any article, material or substance which is capable of being brought and sold for a consideration. It was also noticed that the appellant had not maintained separate accounts for receipt of inputs and input services on which they had availed CENVAT credit and utilized the same in the manufacture of exempted goods. On these allegations, different show-cause notices were issued to the appellant demanding an amount equal to 5% of the value of exempted goods cleared as per Rule 6(3) of CENVAT Credit Rules, 2004, which worked out to be Rs.1,33,977/- in appeal No. E/22156/2014; an amount of Rs.1,75,083/- in appeal No. E/21506/2014 and Rs.7,01,160/- in appeal No. E/1789/2012. The original authority after due process of law confirmed the total demand with interest and also imposed equal penalty. Aggrieved by the said orders, the appellant filed appeals before the Commissioner (A) and the Commissioner (A) vide different impugned orders confirmed the demand with interest. Aggrieved by the said orders, appellants have filed these three appeals.
3. Heard both the parties and perused the records.
4. Learned counsel for the appellant submitted that the issue involved in the present appeals is no more res integra and has been finally settled by the Honble Supreme Court in the case of UOI vs. Hindustan Zinc Ltd. reported in 2014-TIOL-55-SC wherein it was held that when the inputs are used for the manufacture of intended final product, it would be impossible to maintain separate records for unintended byproducts used. The mischief of recovery of 8% under Rule 57CC on exempted goods which arise out of byproduct was held to be not attracted. The demand of an amount of money under Rule 6(3) which is pari materia under provision to Section 57CC is untenable in law. Learned counsel further submitted that by following the Honble Supreme Court this Tribunal in the case of Hariyana Steel and Power vs. CCE reported in 2015 (325) ELT 400 has also followed the Honble Supreme Courts decision and has held that the slag emerged as byproduct / waste during manufacture of sponge iron does not amount to manufacture of exempted goods and therefore, there is no need for reversal of credit as required in terms of Rule 6(3) of CCR, 2004. The Honble Tribunal in para 5 has observed as under:
5. After carefully considering the submissions made by both the 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 Boards Circular No.904/24/2009-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) ELT 373 (All.). Further, vide a recent decision, the Honble Bombay High Court in the case of Hindalco Industries Ltd.: 2015 (315) ELT 10 (Bom.) has set aside the Larger Bench decision of the Tribunal reported at 2014 (308) ELT 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. 4.1 Similarly in the case of N. S. Ispat Pvt. Ltd. vs. CCE reported in 2016 (335) ELT 540 (Tri.-Del.) in the similar circumstances in para 7 has held as under:
7. We find that the same view has been taken by the Honble High Court of Gujarat in the case of Nirma Ltd. (supra) by the Honble Bombay High Court in the case of Rallis India Ltd. (supra) and by the Apex Court in the case of Hindustan Zinc Ltd. (supra). Therefore, the appellant are not liable to pay any amount in respect of clearance of slag/dust which has been cleared by them without payment of duty as same has been emerged during the course of manufacture of M.S. Ingots. Therefore, we do not find any merit in the impugned order, same is set aside. Appeal is allowed with consequential relief, if any.
5. By following the ratios of the decisions cited supra, I am of the considered opinion that the issue is squarely covered in favour of the appellant by the decisions cited supra. Therefore, I set aside the impugned order and allow the appeals of the appellant with consequential relief, if any.
(Operative portion of the Order was pronounced in Open Court on 03/01/2017.) S.S GARG JUDICIAL MEMBER rv 2