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2023 (7) TMI 1172 - CESTAT HYDERABADCENVAT Credit - liability to pay an amount in terms of Rule 6 in respect of “iron ore fines” being cleared by them on receipt of consideration or otherwise - whether the iron ore fines cleared by the appellants were manufactured goods or not and if they were not, whether they would still be subjected to Rule 6 of CCR, both before 01.04.2015 and after 01.04.2015 or otherwise? HELD THAT:- The iron ore fines emerging in the course of sieving/screening of iron ore lumps, cannot be considered as manufactured goods or as manufactured final goods. Therefore, relying on the decision in COMMISSIONER OF CENTRAL EXCISE, RAIPUR VERSUS SELENO STEELS LTD. [2013 (3) TMI 258 - CESTAT NEW DELHI] and TATA METALIKS LTD. VERSUS COMMISSIONER OF CENTRAL EXCISE, PUNE-II [2010 (1) TMI 1065 - CESTAT MUMBAI], it would clearly not be covered by Rule 6 for period before 01.04.2015. Even for the period after 01.04.2015 were such “non-excisable goods” which are to be treated as “exempted goods”, would still not be covered under Rule 6 for the purpose of reversal of credit or payment of an amount equivalent by relying on the ratio in the case of M/S BALRAMPUR CHINI MILLS LTD. THROUGH ITS GENERAL MANAGER VERSUS UNION OF INDIA, MINISTRY OF FINANCE DEPARTMENT OF REVENUE [2019 (5) TMI 972 - ALLAHABAD HIGH COURT], and UNION OF INDIA VERSUS DSCL SUGAR LTD. [2015 (10) TMI 566 - SUPREME COURT] Essentially, unless the good is a manufactured goods, Rule 6 of CCR cannot be made applicable. Even when it is not manufactured and it is refunded to as non-excisable goods, which are required to be treated as the exempted goods, after 01.03.2015, it will not be covered in as much as the “exempted goods” themselves are also required to be manufactured goods first. Therefore Rule 6 would not be applicable in the given facts of the case. Thus, it is clear that there is no manufacturing process involved and therefore the iron ore fines being cleared for a consideration, is not a manufactured goods. Further, respectfully following the ratio of Hon’ble Supreme Court and High Court, unless there is a manufactured product, Rule 6 cannot be invoked. Admittedly, amendment in CCR 2004 with effect from 01.04.2015 has brought “non-excisable goods” also under the ambit of “exempted goods” but the said exempted goods has also to emerge as a consequence of some manufacturing process. The Revenue has not been able to establish that the iron ore fines were “manufactured goods”, which were exempted during the material time and infact they have relied mostly on the amendment made in the CCR 2004 with effect from 01.04.2015 for confirming the demand which also does not help. Since the matter is being decided on merits itself, other arguments on the grounds of limitation, penalties etc are not being considered. Further, with demand not sustaining on merits itself, demand for interest and penalties will also not survive. Appeal allowed.
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