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2020 (9) TMI 786 - AT - Central ExciseReversal of Cenvat Credit - clearance of iron ore fines - separate excisable goods but exempted commodity or not - whether iron ore fines in question are needed to be considered as exempted goods, being sold for consideration during the relevant period as provided under the amended provisions of Rule 6 (1) of CCR, 2004? - HELD THAT:- It is foremost important to understand the procedure or the activity of the appellant. Not only from the show cause notice, but from the appellant’s submission, the admitted procedure adopted by the appellant in manufacturing the final product i.e. ‘sponge iron’ is that, the appellant procures iron ore etc., as the input for manufacturing sponge iron. The iron ore lumps of different sizes are first crushed and are then segregated by screening. It is thereafter that requisite sized iron ore /ore lump is fed in the sponge iron klin. In the aforesaid process of segregation, the iron ore fines are inevitably generated. Thus these fines, cannot be considered as the result of the manufacturing activity of the appellant, since no manufacturing activity is involved for emergence of the same out of iron ore by the appellant. It is not the case of the respondent that sieving out of the finer input from coarser one, will be a manufacturing activity. In the present case, the fine iron ore (input) is inevitably generated in the process of segregation, is admittedly not usable in the klin for the purpose of manufacture of the final product i.e. the sponge iron. However, it is still the part of the input. The iron ore fines are therefore, held not to be the excisable commodity. The findings of original adjudicating authority are found to be correct. The findings of impugned order under challenge being contradictory to this effect, are held perverse and liable to be set aside - Further, the Department has brought nothing on record to show that the iron ore fines can be considered as exempted goods. Admittedly, there is no Notification of the Revenue granting exemption to this product. Thus, the embargo created in Rule 6 (3) (b) of CCR will not apply for removal of iron ore fines from the appellant’s factory. Appeal allowed - decided in favor of appellant.
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