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M/S Balrampur Chini Mills Ltd. Through ... vs Union Of India , Ministry Of Finance ... on 12 April, 2019
22. The appellants have also relied upon Balarampur Chini Mills Ltd., Vs
UOI [2019 (368) ELT 276 (All)]. In this case, the issue was whether Rule 6
of CCR would be applicable to "Bagasse" emerging as a residue/waste of
sugarcane in the course of manufacture of Sugar, is a manufactured product
or a final product of the sugar cane or otherwise. Hon'ble High Court held it
was neither a manufactured product nor a final product. The Hon'ble High
Court also took into account the changes brought in Rule 6(1) by means of
inserting explanation 1 and 2 with effect from 01.03.2015, which provided
that exempted goods or final products shall include "non-excisable goods
cleared for consideration" from the factory. It also considered that by way
of Circular dated 25.04.2016 the CBIC interpreted the said amendment and
held that Bagasse was an exempted products in terms of explanation1. The
relevant paras of Hon'ble High Court in this case is quoted, as under:
Cce & St, Raipur vs M/S Aarti Sponge And Power Ltd on 18 November, 2014
In CCE & ST, Raipur Vs Aarti Sponge and Power Limited, the Tribunal
upheld the order passed by the Commissioner (Appeals). The Commissioner
(Appeals) had taken a view that emergence of iron ore fine cannot be held
to be a manufacturing activity and the fact that such iron ore fines cleared
without payment of duty, would not call upon the assessee to pay the 10%
of the value of the same in terms of Rule 6, relying on several other
decisions of the Tribunal.
Union Of India vs Dscl Sugar Ltd. on 24 July, 2015
In their conclusion, the Hon'ble Court held that in the absence of
Bagasse being a manufactured final product, the application of Rule 6 of CCR
was not attracted and that the ratio laid down in the DSCL case will still hold
good. Ultimately CBIC Circular No. 1027/15/2016-CX dated 25.04.2016 to
the extent it included Bagasse under the purview of reversal of input service
credit in terms of Rule 6 of CCR 2004 was quashed by the Hon'ble High
Court.
Cce, Raipur vs M/S.Seleno Steels Ltd on 28 July, 2011
In the case of CCE, Raipur Vs Seleno Steels Ltd.,[2013 (287) ELT 93
(Tri-Del)], the Tribunal held that iron ore fines emerging during the process
of iron ore are nothing but smaller piece of iron ore which are not usable for
manufacture and therefore same cannot be hold to be as a result of
manufacture. Relevant para is reproduced as under:
The Central Excise Act, 1944
C.C.E., Meerut Ii vs Maa Mangla Ispat Pvt. Ltd on 25 March, 2013
v) CCE, Meerut-II Vs Maa Mangla Ispat Pvt Ltd.,
[2013 (293) ELT 380 (Tri-Del)]
Union Of India & Ors vs M/S Hindustan Zinc Ltd on 6 May, 2014
20. Therefore, all the cited judgments are also supporting the contention
of the appellant that if the goods, in this case iron ore fines, were not a
result of a manufacturing activity, and therefore not a manufactured good,
then in that case Rule 6 would not be applicable. These judgments also
(9) Appeal No. E/30237/2020,
E/30334/2021 & E/30214/2022
support the agreement that the emergence of iron ore fines is inevitable in
the process of manufacturing final product i.e. Sponge Iron, and therefore
not a manufactured product. The Department has already considered in an
indirect manner that this was a non-excisable goods, therefore it cannot be a
manufactured goods. Therefore on this ground also, one has to arrive at the
conclusion that iron ore fines, as emerging in the case of mere
screening/sieving of iron ore lumps would not be a manufactured goods.