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2022 (9) TMI 621 - Central Excise
Liability of central excise duty on removal of iron ore fines/iron ore concentrates - levy of penalty - Iron ore fines/iron concentrates - Cenvat credit availed at the time of receipt in the factory but at the time of removal proportionate was not been reversed under provisions of Rule 3(5) of Cenvat Credit Rules, 2004 - receipt of short quantity of coal by 266.420 MT in their factory premises as compared to the quantity shown in the bill - HELD THAT:- So far as the demand under Rule 3(5) ibid on clearance of Iron Ore Fines/Iron Ore Concentrate is concerned, the issue is no more res integra in view of the decision of this Tribunal in the matter of CCE, RAIPUR VERSUS M/S. NUTAN ISPAT & POWER LTD. [2016 (11) TMI 924 - CESTAT NEW DELHI] in which also the issue was whether the Iron ore fines, which are not used by the assessee in further manufacture and cleared, will attract the provisions of Rule 3(5) ibid and the Tribunal while giving the finding in favour of the assessee therein, rejected the appeal of the revenue.
In the instant case while explaining the procedure, learned counsel submits that during the manufacturing process of the sponge iron, iron ore fines are generated at the time of screening/grading and crushing, which is nothing but waste and in order to keep the production at a constant pace the aforesaid process of screening is essential and indispensable and iron ore and coal fines contents have to be removed else it would stick on the inner wall of the kiln and reduce the space inside the kiln, called accretion. Therefore it can safely be concluded that the fines etc are by-product or incidental product which cannot be said to be inputs as such which by any stretch of imagination cannot be said to attract the provisions of Rule 3(5) ibid - This issue is decided in favour of the Appellant.
Short receipt of 268.420 MT of coal - HELD THAT:- There is no allegation or any evidence of clandestine removal of the said quantity of coal. Mere shortage cannot ipso facto lead to the allegation of clandestine removal - According to learned counsel the said short receipt is sometimes due to transit loss/theft and as per industrial practice ± 4% is permissible. Since this short receipt cannot be treated as clandestine removal therefore there is no reason not to accept the submission/explanation given by the learned counsel. Therefore on this issue also demand cannot be sustained.
Wrongly availed Cenvat credit of Rs.9,768/- on input service paid on GTA service against sponge iron received back from the customers - HELD THAT:- This issue is also covered in favour of the assessee in view of the decision of a coordinate Bench of the Tribunal in the matter of CHITRAKOOT STEEL & POWER PVT. LTD. VERSUS COMMR. OF C. EX., CHENNAI [2007 (11) TMI 135 - CESTAT, CHENNAI] in which it has been held that no demand can be made for input services if the finished goods are received back.
As in view of facts of this case, all the issues involved herein are decided in favour of the appellants therefore, the issue of extended period of limitation need not be addressed.
Appeal allowed - decided in favor of appellant.