2013 (3) TMI 258

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....cess of manufacture of Sponge Ores, Iron Ore Fines emerged, which are being cleared by the respondent without payment of duty. 3. The respondent were also availing the Cenvat credit in respect of GTA services received for inward carriage of Iron Ore. They were not maintaining separate accounts of the same. Revenue by entertaining a view that such services were being used commonalty for both the dutiable as well as exempted goods i.e. for Sponge Iron and Iron Ore Fines, they are required to pay 10% of the price of Ore Fines, in terms of the provisions of Rule 6. Accordingly, proceedings were initiated against the respondent by issuance of show cause notice dated 29-9-2008 proposing to confirm demand of Rs. 5,52,158/- @ 10% of the pri....

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....cal and physical properties of Iron ore and Iron ore fines remains the same, therefore, there is no manufacture of a distinct commercial commodity having different name, character or use. That being the case, provisions of Rule 6 cannot be invoked in the instant case as it requires manufacture of two final products out of common input/input services whereas in the instant case only one final product is manufactured and the Iron ore fines are merely unavoidable waste generated in the process of manufacture which is not a manufactured final product. They also challenged the impugned order on the point of limitation. 6. Commissioner (Appeals) vide his impugned order set aside the order of the adjudicating authority and allowed the appe....

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..... This was also a view of Hon'ble Supreme Court in the case of Empire Ind. Limited v. UOI - 1985 (20) E.L.T. 179 (S.C.) and State of Maharashtra v. Mahalaxmi Stores - 2003 (152) E.L.T. 30 (S.C.). In the present case appellant have set up their factory to manufacture sponge iron and the raw material used by them are iron ores. They proceed lumps of such iron ore which are subjected to grading so that chunks of iron ore of size, usable in their kiln, can be obtained. In process of handling, shorting, grading screening etc of iron ore lump, pieces of size upto 5 mm ore also obtained, which they termed as Iron ore fines. These are not usable in the kiln for the purpose of recovery of sponge iron. Nevertheless what is obtained as iron ore fine a....

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....unusable segregated raw material. Therefore provisions of Rule 6(2) and 6(3)(b) of the Cenvat Credit Rules are not attracted and hence the impugned order-in-original passed by adjudicating authority is not sustainable and liable to be set aside. I hold accordingly." 7. Revenue in their memo of appeal have contended that Iron Ore Fines is excisable product inasmuch as there is a separate tariff item No. under Chapter 26 of the Central Excise Tariff and the same are exempted in term of Notification No. 4/2006. As such, it is their contention that provision of Rule 6 would apply. However, there is no challenge to the finding of Commissioner (Appeals) that there is no manufacture invoked. 8. After going through the reasoning ado....