Whether appellant(a manufacturer of pig iron) is required to pay the amount as per Rule 6 of the Cenvat Credit Rules, 2004 for boulder slag which is excisable?

PJ/Case Law /2016-17/3395

Case:-NEO METALIKS LTD. VersusCOMMISSIONER OF C. EX. & S.T., BOLPUR

Citation:- 2016 (342) E.L.T. 274 (Tri. - Kolkata)

Brief facts:- This appeal has been filed by the appellant against Order-in-Appeal No. 260/Bol/2012, dated 5-12-2012 passed by Commr. of Central Excise (Appeals), Kolkata-III. Under this Order-in-Appeal dated 5-12-2012, Commissioner has upheld Order-in-Original dated 30-4-2008.

Appellant’s contention:-Shri S.P. Siddhanta, Consultant appearing on behalf of the appellant argued that the demand of Rs. 77,483/- has been confirmed against the appellant as per Rule 14 of Cenvat Credit Rules, 2004 read with Section 11A of the Central Excise Act, 1944. It is the case of the appellant that they are the manufacturer of pig iron falling under Chapter 72. That in the course of manufacture of the pig iron, bolder slag comes into existence at the bottom of the furnace which is not liable to excise duty. That first appellate authority in Para 5 of Order-in-Appeal dated 5-12-2012 has held that amount with respect to exempted goods (boulder slag) is payable under Rule 6 of the Cenvat Credit Rules, 2004. It is the case of the appellant that the raw material on which the Cenvat credit is used are not for the manufacture of boulder slag and no amount under Rule 6 of the Cenvat Credit Rules, 2004 is payable. Ld. Consultant relied upon the case law of Tata Metaliks Ltd. v. Commr. of C. Ex., Kolkata-II - 2003 (155) E.L.T 117 (Tri.-Kolkata), where similar product was considered to be non-excisable. Ld. Consultant made the Bench go through Para 5 of this case law to argue that blast furnace slag is not excisable.

Respondent’s contention:- Shri J. Bose, AC (AR) appearing on behalf of the Revenue argued that boulder slag is classifiable under Central Excise Tariff Heading 2690 of the Central Excise Tariff Act, 1985 and stands exempted as per Sl. No. 6 of General Exemption Notification No. 52A. It was his case that since boulder slag is excisable; therefore, appellant is required to pay the amount as per Rule 6 of the Cenvat Credit Rules, 2004.

Reasoning of judgement:-Heard both sides and perused the case records. Appellant is the manufacturer of pig iron and is taking Cenvat credit on the raw materials used for the manufacture of pig iron. All the inputs utilised in the manufacture of pig iron and boulder slag is only waste in the manufacture of pig iron. The Cenvat credit is, therefore, not taken specifically for the manufacture of boulder slag. It has been held by the Court that wastes like sugarcane coming into existence in the manufacture of sugar cannot be held to be excisable for the purpose of payment of amounts under Rule 6 of the Cenvat Credit Rules. Accordingly, appeal filed by the appellant is allowed by setting aside Order-in-Appeal dated 5-12-2012 by holding that the materials are not used in the manufacture of exempted boulder slag but are only used in the manufacture of pig iron.
Appeal filed by the appellant is allowed.
(Operative part of the order already pronounced in the Court)

Decision:- Appeal allowed

Comment:- The analogy of case is that the appellant is the manufacturer of pig iron and is taking Cenvat credit on the raw materials used for the manufacture of pig iron and all inputs are utilised in manufacture of pig iron and boulder slag is only waste in the manufacture of pig iron. From above it is clear that cenvat credit is not taken for boulder slag and assesse is not required to pay amount as per Rule 6 of the Cenvat Credit Rules, 2004.

PREPARED BY: RAKSHAY TATER

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PJ/Case Law /2016-17/3395

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