TaxTMI 
TaxTMI 
2026 (9) TMI 820
X X X X Extracts X X X X
X X X X Extracts X X X X
....1,54,979/-, along with interest and penalties, confirmed against the respondent by Order-in-Original dated 26.12.2016. 2. The fact in brief is that the respondent is engaged in the manufacture of sponge iron falling under tariff items 72031000 of the Central Excise Tariff. During the course of manufacture, certain materials, namely dolochar, fly ash, waste material and iron ore fines, emerged and were cleared without payment of duty. The Department entertained the view that these materials were marketable excise goods and, accordingly, issued the Show Cause Notice dated 04.02.2016 covering the period from April, 2010 to January, 2015. 3. The Adjudicating Authority held the disputed materials to be excisable and confirmed the duty dema....
X X X X Extracts X X X X
X X X X Extracts X X X X
....cture of sponge iron and are not products manufactured by the respondent. 6. It is further submitted that dolochar, even if treated as excisable, is unconditionally exempt under Notification No. 4/2006-CE dated 01.03.2006 and Notification No. 12/2012-CE dated 17.03.2012 as waste arising from the manufacture of iron or steel. The respondent also contest the invocation of the extended period on the ground that the issue is interpretational and all relevant facts were reflected in its statutory and other records. 7. Heard both the sides and perused the record. 8. The principal issue before us is whether dolochar, fly ash, iron ore fines and other waste materials arising incidentally during the manufacture of sponge iron can be subject....
X X X X Extracts X X X X
X X X X Extracts X X X X
....le Supreme Court held that waste or residue arising inevitably during the manufacture of another product cannot be subjected to duty unless it is shown to have emerged through a process amounting to manufacture. Similarly, in Hindalco Industries Ltd., Vs Union of India, 2015 (315) E.L.T. 10 (Bom), affirmed by the Hon'ble Supreme Court as reported in 2019 (367) E.L.T. A246 (SC), it was held that refuse or waste arising during manufacture cannot be treated as excisable merely because it possesses some sale value. 12. Dolochar Dolochr is the partially burnt coal or coal char remaining in the rotary kiln during the manufacture of sponge iron. It emerges inevitability and is not the result of any independent process undertaken to manufactu....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... is not excisable. 15. Thus, the mere fact that fly ash is capable of being sold or is specified in a tariff entry cannot establish manufacture. The respondent's subsequent payment of duty, evidently made as a matter of caution, cannot constitute an admission contrary to the correct legal position. There can be no estoppel against law. 16. Iron ore fines and other waste materials Iron ore fines arise through handling, screening or segregation of iron ore. There is no material on record showing that the respondent undertook benefication, enrichment or any other process by which a new and distinct product emerged. The mere reduction or segregation according to size does not, by itself amount to manufacture. In Tarini Prasad Mohaty Vs....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... Exemption available to dolochar Even otherwise, the respondent has claimed the dolochar falls under chapter 26 as waste arising from the manufacture of iron or steel and is covered by Serial No. 6 of Notification No. 4/2006 - CE dated 01.03.2006 and, for the subsequent period, Serial No. 57 of Notification No. 12/2012-CE dated 17.03.2012. 19. The exemption entries cover "slag, dross, scaling and other waste from the manufacture of iron or steel" falling under chapter 26. If the Department seeks to classify dolochar under chapter 26 as waste arising from the manufacture of sponge iron, the concerning unconditional exemption cannot be denied. Therefore, even on the alternative assumption that dolochar is excisable, no effective duty li....