Tribunal allows appeals on iron ore fines classification, dismisses interest and penalties demand.

The Tribunal allowed the appeals, setting aside previous orders and granting consequential relief. It held that iron ore fines, not considered manufactured goods, are not subject to Rule 6 of CCR 2004, even post-amendments from 01.04.2015. The demand for interest and penalties was dismissed.

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Issues Involved:
1. Whether iron ore fines are manufactured goods or non-excisable goods.
2. Applicability of Rule 6 of Cenvat Credit Rules (CCR) 2004 to iron ore fines.
3. Impact of amendments to CCR 2004 post 01.04.2015 on the treatment of iron ore fines.

Summary:

Issue 1: Whether Iron Ore Fines are Manufactured Goods or Non-Excisable Goods
The appellants, engaged in manufacturing sponge iron, generate iron ore fines during the process of crushing/screening/grading iron ore lumps. The key contention was whether this process constitutes "manufacture." The Commissioner (Appeals) and the Tribunal, relying on various precedents, concluded that iron ore fines are not a result of a manufacturing process but are non-excisable goods. The Tribunal referenced multiple judgments, including *CCE & ST, Raipur Vs Aarti Sponge and Power Ltd.*, which held that the emergence of iron ore fines does not amount to manufacture.

Issue 2: Applicability of Rule 6 of CCR 2004 to Iron Ore Fines
Rule 6 of CCR 2004 mandates payment of an amount equivalent to 6% of the value of exempted goods if separate accounts are not maintained. The Commissioner (Appeals) and the Tribunal examined whether this rule applies to iron ore fines. The Tribunal, citing the *Union of India Vs DSCL Sugar Ltd.* case, concluded that Rule 6 applies only to manufactured goods. Since iron ore fines are not manufactured goods, Rule 6 was deemed inapplicable.

Issue 3: Impact of Amendments to CCR 2004 Post 01.04.2015
Post-amendment, "non-excisable goods" cleared for consideration were included under "exempted goods" per Rule 6. However, the Tribunal, following the ratio in *DSCL Sugar Ltd.* and *Balarampur Chini Mills Ltd.*, held that even post-amendment, Rule 6 applies only if the goods are manufactured. Since iron ore fines are not manufactured goods, the amendments do not alter their treatment under Rule 6.

Conclusion:
The Tribunal set aside the orders dated 23.10.2019, 28.10.2020, and 29.03.2022, and allowed the appeals with consequential relief. The judgment emphasized that iron ore fines, not being manufactured goods, are not subject to Rule 6 of CCR 2004, even after the amendments effective from 01.04.2015. The demand for interest and penalties was also dismissed.

Order Pronounced:
(Order pronounced in the open court on 26.07.2023)

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