TaxTMI 
TaxTMI 
2002 (1) TMI 136
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....us iron and steel products. They are availing the benefit of Modvat credit of duty paid on the inputs namely Caustic Soda, Cateletic Ion, Sulphuric Acid, Liquid Oxygen and Wash Oil. During the course of manufacture of iron and steel, various other by-products and intermediate products also emerge. The said products are Burnt Dolomite, Coal Tar and Amonium Sulphate falling under Chapters 25, 27 and 31 of the CETA, 1985. The said products were being cleared by the appellant at nil rate of duty, inasmuch as the same were either chargeable to nil rate of duty or/and exempted from payment of duty. 3. The appellants were issued two show cause notices dt. 3-5-2000 and 6-6-2000 for the periods 1-9-96 to 31-10-99 and 1-11-99 to 29-2-2000 ra....
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....duty, as proposed in the notice along with imposition of personal penalty. The said order of the Commissioner is impugned before us. 5. Shri K.K. Banerjee, ld. Adv. appearing on behalf of the appellants submits that the appellant is a unit primarily for the manufacture of iron and steel articles thereof from iron ore. The process of manufacture of iron and steel from iron ore is as under :- "Iron Ore is charged in the blast furnace where coke is used as fuel to obtain molten metal in melting shop. The said coke is obtained by the process of carbonization of coal at high temperature in coke oven where coke oven gas is produced. The coke oven gas is pumped out by pump driven by steam. The steam is produced in the Boiler where demi....
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....r passed by the Commissioner. Admittedly the appellants' starting inputs are Catalytic Ion, Caustic Soda and Sulphuric Acid on which they have availed the benefit of Modvat credit of duty paid on the same. From the flow chart of use of inputs placed on record by the appellants we find that the said inputs are used in demineralization plant and the demineralized water is further used in the manufacture of steam. Steam, so emerged, is captively consumed in coke oven where coal is added and the coke so emerging from the oven is further used along with iron ore in blast furnace. At this stage coke oven gas produced in coke oven is used in by-product plant resulting in emergence of three products Coal Tar, Amonium Sulphate and Burnt Dolomite. Th....
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....ntentionally manufactured by the appellant and as such the provisions of Rule 57CC will not apply to them, does not impress us inasmuch as a plain reading of Rule 57CC makes it clear that no distinction has been made between the intended final products or the by-products. The said rule requires the assessee to pay an amount equal to 8% of the price of the final products cleared at nil rate of duty even where the inputs have been directly or indirectly used in the manufacture of such final products and even where they are not contained in the said final product. The expression used in the said Rule 57CC that inputs which are used in or in relation to the manufacture of both the categories of final products, i.e. dutiable as well as exempted ....