TaxTMI 
TaxTMI 
2003 (8) TMI 83
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....duction in the upper half of the furnace and the directly reduced iron is melted along with fluxes in the lower portion of the furnace. By the aforesaid process, the products which emerges are - Sl. No. Description of Products Tariff Heading Tariff Rate (i) Hot liquid iron/Pig iron 7201 16% (ii) Granulated Slag 2618 16% (iii) Non-Granulated Slag 2619 16% There also emerges a by-product known as Corex gas, which attracts 'nil' tariff rate of duty, under Heading 2705.00 (b) The hot liquid iron is consumed captively for manufacture of steel slabs which in turn are used in the strip mill for production of HR Coils/Sheets. The granulated and the non-granulated slag are sold to independent customers. Some quantity of the Corex gas is consumed captively in the basic oxygen furnace and hot strip mill, and certain quantity is also flared up in the flaring system. Some Corex gas is also sold through pipeline to two adjacent factories namely M/s. Jindal Tractebel Private Co. Ltd. (hereinafter referred to as JTPCL) and M/s. Jindal Praxair Oxygen Co. Ltd. (hereinafter referred to as JPOCL). These two....
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....ule 57G declaration as a final product. Therefore, although corex gas an excisable product, it is not a final product for the appellant. Rule 57CC would have been applicable only if the appellants were manufacturing two types of steel, one of which is exempted from excise duty. In fact, the relevant rule is Rule 57D which provides that : "credit of specified duty shall not be denied or varied on the ground that part of the inputs is contained in any waste, refuse or by-products arising during the manufacture of the final product, whether or not such waste or refuse or by-product is exempt from the whole of the duty of excise leviable thereon or chargeable to nil rate of duty..........". (iii) The provisions of Rule 57D, which is directly applicable to corex gas as a by-product. It was submitted that Rule 57CC is to be construed harmoniously with the other rules including Rule 57D. (iv) The demand was also challenged on the grounds of limitation as the emergence of a by-product namely corex gas was known to the Department as this was declared in the Rule 173B declaration. The statements of Shri Vijayakumar and Shri....
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....e Commissioner found that the appellant's contention that they are not the manufacturer of Corex gas and the said gas was not a final product and no inputs were used for the manufacture of that gas, was not tenable and could not be accepted and he, thereafter held as under: "21. On the basis of the definitions of 'final product', 'inputs' and findings as above, I find that JVSL's contention that they are not the manufacturer of Corex gas and the Corex gas is not the final product and no inputs are acquired and used by them for the manufacture of Corex gas is not tenable and cannot be accepted. Since waste, scrap and by-products are dutiable even if they are not manufactured, as these are produced, similarly Corex gas which is a by-product as admitted by JVSL would attract the provisions of Central Excise Rules. Therefore, I am of firm view that Corex gas a by-product, which emerges during the manufacture of HR Coils/Sheet is a final product so far as Central Excise Rules are concerned". (d) Thereafter, on examination of the provisions of Rule 57CC/57AD and the fact that the appellants were availing Modvat credit of the specified inputs, and....
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.... 57AH(2) of the Central Excise Rules, 1944 read with Section 11AC of the Act and Rule 173Q(1) of the Central Excise Rules, 1944 and ordered the payment of appropriate interest in terms of Rule 57AH(1). 4. After hearing both sides and considering the material on record, it is found : (a) The show cause notice proposes the recovery of an amount of Rs. 1,79,78,566/- being 8% of the price of Corex gas removed during the period 1-10-99 to 31-7-2000, to be recovered under Rule 57AH(1) of Central Excise Rules, 1944 read with Section 11A(2) and the proviso of Section 11A(1) of the Central Excise Act, 1944. It is well settled that the amount required to be deposited in terms of Rule 57CC(1)/57AH(1), has nothing to do with duty. It has no relation to value under Section 4 of goods or the credit taken under the Modvat scheme. It is in fact not duty at all, as held by the Board in its Circular B-42/1/96, dated 27-9-1996, reproduced in 1996 (17) RLT M 17. Therefore, there cannot be a demand issued and/or confirmed under the provisions of Section 11A of the Central Excise Act, 1944 read with Rule 57AH and/or Rule 57-I of the Modvat Rules. Fol....