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2013 (5) TMI 268 - AT - Central ExciseEmergence of the iron ore fines - unavoidable waste or by-product - reversal of cenvat credit - exempted goods - whether the GTA service can be said to be commonly used in the manufacture of dutiable and final product - whether the provisions of Rule 6(3)(b) of Cenvat Credit Rules, 2004 would be attracted? - Held that:- Iron ore fine emerges as an inevitable waste while screening and sieving the iron ore for removal of smaller particles prior to manufacture of sponge iron. The provisions of Rule 6(2) and Rule 6(3) of Cenvat Credit Rules, 2004 are applicable when a manufacturer consciously manufactures two products an excisable and the other fully exempted product using common inputs and /or input services. In this case iron ore fine has emerged as an unavoidable and inevitable waste and compliance with the provisions of Rule 6(2) is impossible. The provisions of Rule 6(3)(b) of Cenvat Credit Rules, 2004 become applicable only if the manufacturer consciously manufactures dutiable and exempted final product using common cenvat credit availed inputs and/or input services and does not comply with the provisions sub-rule (2) of Rule 6 of Cenvat Credit Rules, 2004. It would not apply in a case like this when the exempted final product emerges as an unavoidable waste or by-product and compliance with the provisions of Rule 6(2) is impossible. In the case of Rallis India Ltd. (2008 (12) TMI 46 - HIGH COURT BOMBAY) the Hon’ble Bombay High Court held that in such circumstances, the provisions of Rule 6 (2) would not be applicable. The Revenue’s appeal is accordingly dismissed.
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