2020 (9) TMI 786

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....lled CCR). While verifying the ER-1 Returns of the appellants for the period April 2014 or January, 2016, the Department observed that the appellants have discharged their duty liability on their final product i.e. sponge iron and billet, but their returns had no mention of any amount of duty paid on iron ore fines manufactured and removed during the said period. 3. The Department also observed that in manufacture of sponge iron, iron ore lumps of different sizes are firstly subjected to crushing, thereafter iron ore fines are taken out/screened out at the raw-material handling plant. The said taken out /screened out iron ore fines, which are in powder form, cannot be used for manufacture of sponge iron. Iron ore lumps and iron ore fines a....

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.... the records. 5. It is submitted on behalf of the appellant that the iron ore fines, since were not obtained by undertaking any such process, which may amount to manufacture under Rule 2 (f) of the Central Excise Rules, the fines cannot be called excisable goods. There is no Notification which has granted any exemption to this Product. Hence, the allegations of the Department are not sustainable. Otherwise also the appellants are registered with the Excise Department for manufacturing of excisable goods i.e. 'sponge iron' and not for the 'iron ore fines'. However, iron ore and coal are their raw-materials. Hence in accordance to provisions of Rule 3 of CCR, on receipt of the iron ore in the factory, the appellants are eligible for the cenv....

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....r the iron ore fines as cleared by the appellants can be considered as a separate excisable goods but exempted commodity." 8. For the purpose, it is foremost important to understand the procedure or the activity of the appellant. Not only from the show cause notice, but from the appellant's submission, the admitted procedure adopted by the appellant in manufacturing the final product i.e. 'sponge iron' is that, the appellant procures iron ore etc., as the input for manufacturing sponge iron. The iron ore lumps of different sizes are first crushed and are then segregated by screening. It is thereafter that requisite sized iron ore /ore lump is fed in the sponge iron klin. In the aforesaid process of segregation, the iron ore fines are inevi....

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....at the iron ore fines can be considered as exempted goods. Admittedly, there is no Notification of the Revenue granting exemption to this product. Thus, I am of the opinion that embargo created in Rule 6 (3) (b) of CCR will not apply for removal of iron ore fines from the appellant's factory. Confirmation of demand by Commissioner (Appeals) is therefore, held to be not proper and unjustified. The decision of this Tribunal in the case of Commissioner, Excise and Service Tax, Raipur vs. Arathi Sponge and Power Ltd.. - 2016 (333) ELT 415 supports my finding. The facts of that case are identical in the present appeals. The Tribunal while relying upon previous decision in the case of Real Ispat & Power Ltd. reported as 2013 (287) ELT 494 and als....