Custom, Excise & Service Tax Tribunal
Cce, Raipur vs M/S.Heg Ltd on 19 February, 2016
IN THE CUSPTOMS, EXCISE AND SERVICE TAX APPELLATE TRIBUNAL, NEW DELHI, PRINCIPAL BENCH NEW DELHI
Date of Hearing/decision:19.02.2016
Excise Appeal No.E/2547/2006-EX (DB)
[(Arising out of Order-in-Appeal No.45/RPR-II/2006 dated 27.04.2006 passed by the Commissioner (Appeals), Customs & Central Excise, Raipur]
For approval and signature:
Honble Shri S. K. Mohanty, Member (Judicial)
Honble Shri B. Ravichandran, Member (Technical)
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Whether Press Reporters may be allowed to see the Order for publication as per Rule 27 of the CESTAT (Procedure) Rules, 1982?
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Whether it should be released under Rule 27 of the CESTAT (Procedure) Rules, 1982 for publication in any authoritative report or not?
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Whether Their Lordships wish to see the fair copy of the Order?
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Whether Order is to be circulated to the Departmental authorities?
CCE, Raipur .Appellants
Vs.
M/s.HEG Ltd. .Respondent
Appearance:
Rep. by Shri R.K. Grover, DR for the appellant. Rep. by Ms. Surabhi Sinha, Advocate for the respondent. Coram: Honble Shri S.K. Mohanty, Member (Judicial) Honble Shri B. Ravichandran, Member (Technical) Final Order No.51006/2016 dated:19/02/2016 Per B. Ravichandran:
Revenue is in appeal against order dated 27.04.2006 of Commissioner (Appeals)-II, Raipur. The respondents are engaged in the manufacture of Sponge Iron. Char/dolochar produced in the process are captively consumed for generation of electricity. Most of the electricity so produced are not used in appellants factory. Proceedings were initiated to deny exemption under notification no.67/95-CE dated 16.03.1995 for char/dolochar. The Original Authority vide his order dated 28.02.2005 dropped the demand and allowed the benefit of notification. On appeal by the department, the Commissioner (Appeals) vide the impugned order rejected the appeal and upheld the original order. Aggrieved by this order, the Revenue preferred the present appeal.
2. The Departments case is that the char/dolochar classifiable under heading 2621.00 is not eligible for above mentioned exemption notification as most of the electricity generated are not used by the respondent in the factory. Further, it is contended that the Commissioner (Appeals) fell in error in relying on the decision of Honble Supreme Court in Ahmedabad Electricity Co. Ltd. 2003 (158) ELT 3 (SC). The facts of the present case are different, in as much as the coal here is used as a raw material, not as a fuel. Though coal is burnt in the process in partakes in the process of manufacture of sponge iron. The char/dolochar is not merely a burnt residue but a product emerging from raw materials which is different and hence a excisable commodity.
3. The ld. Counsel for the respondent submitted that the original proceedings against them was to deny exemption under notification no.67/95 as all the electricity generated are not used by them in their factory. Now, in the second appeal stage the department is raising a new ground about non-applicability of Honble Supreme Court decision in Ahmedabad Electricity Co. Ltd. (supra). The Original Authority allowed the concession correctly which was again upheld by Commissioner (Appeals) also.
4. Heard both the sides and perused appeal records.
5. The point for decision is the respondents duty liability on char/dolochar emerging during the course of manufacture of sponge iron. Such char/dolochar was captively consumed in generation of electricity. Since most of the electricity was not captively used, the exemption under notification no.67/95 claimed for char/dolochar was sought to be denied. We notice that the electricity generated in the respondent unit is not solely using char/dolochar. Out of three boilers, 2 are working on heat recovery of waste gases coming out of the sponge iron kiln for production of steam, the third one is a combustion type in which solid fuels like coal, coal fires, char/dolochar are used to produce steam. Viewed with these facts in the background, there is no substance in the demand made by the department to deny the above mentioned exemption. The respondent claims that char/dolochar constitutes only 14-18% of the inputs used for generating electricity. 25% of total electricity is used for manufacture of sponge iron. There is no comment or contest on these assertion by the Revenue in the appeal. The Original Authority and Appellate Authority are right in holding against the demand of duty.
6. We also find in the respondents own case, the Tribunal vide Final Order No.307-310/2004-NB( C ) dated 19.04.2004 held that Char/Dolochar is not liable to excise duty in terms of Supreme Courts decision in Ahmedabad Electricity Company Ltd. (supra).
7. Considering the above discussion and analysis, we find that there is no merit in the appeal by the Revenue and the same is accordingly dismissed.
[Operative portion already pronounced in open court] ( S.K. Mohanty ) Member (Judicial) ( B. Ravichandran ) Member (Technical) Ckp.
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