TMI Blog2015 (11) TMI 45X X X X Extracts X X X X X X X X Extracts X X X X ..... Jajpur for manufacture of the said dutiable pellets falling under Chapter 26 of CETA, 1985 - Exemption under Notification No. 4/06-CE dated 1/03/2006 - Held that:- Out of iron ore fines(uneven sizes) iron ore concentrates in slurry form are manufactured and transported/cleared through pipelines to their pellet plant. The said iron ore concentrate became chargeable to duty w.e.f 01.03.2011. Therefore, it cannot be said that the inputs were directly used by bringing the same from the mines to the pellet plant at Jajpur. On the other hand, in the benefication plant the Iron Ore fines are converted into Iron ore concentrates in slurry form. In our opinion, therefore, the ratio laid down in Vikram Cement s case is not applicable to the facts of the present case. Consequently, the Appellants are not eligible to avail credit at their Pellet plant at Jajpur on the duty paid on the inputs , Capital goods and input services which are used in or in relation to the manufacture of Iron Ore concentrates at the benefication plant at Barbil. However, we find force in the contention of the ld. Advocate that in procuring the iron ore concentrate in slurry form through pipe line from ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... separate factory, situated at a different and demarcated place, around 221kms. away from Jajpur plant, therefore, the CENVAT Credit is not admissible at their factory at Jajpur. Further, it is alleged that since the said inputs, capital goods and input services were not used in their factory at Jajpur but used at Barbil in their benefication plant in or in relation to the manufacture of Iron Ore Concentrate, exempted under Notification No. 4/06-CE dated 1/03/2006, hence not eligible to CENVAT Credit in view of Rule 6 (1) and Rule 6 (4) of CENVAT Credit Rules, 2004. The Ld. Commissioner on adjudication, confirmed the demand and imposed penalty of ₹ 2.00 Crores under Rule 15 (1) of the CENVAT Credit Rules, 2004. Hence the present appeal. 3. Advancing the argument on behalf of the appellant, the Ld. Advocate Shri S.C. Mohanty for the appellant had submitted that in order to use the iron ore obtained from mines by subjecting to the process like crushing, screening, sizing, etc. known as beneficiation process, a separate plant had been set up at Barbil around 221 Kms. away from their jajpur factory. He has submitted that the iron ore concentrate manufactured in the beneficiatio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at Barbil and bringing slurry through pipelines are definitely eligible to CENVAT Credit as the same are used in or in relation to manufacture of final products. It is his submission that the input services used in bringing the slurry have deep nexus with the manufacturer of the final products at Jajpur Plant. In support, he has referred to the decision of Bombay High Court in the case of Deepak Fertilisers Petrochemicals Corpn. Ltd. Vs. C.C. Ex., Belapur- 2013 (32) STR 532 (Bom). 6. Advancing their alternate argument, the Ld. Advocate has submitted that duty paid on inputs, capital goods and service tax used in or in relation to the manufacture of iron ore concentrate in the beneficiation plant at their Barbil Unit are eligible to CENVAT Credit at the said factory. It is his submission the Appellant had commenced manufacture of the dutiable product viz. Iron Ore Concentrate after the said unit was registered with the Central Excise Department w.e.f. 26/11/2012 and removed the same w.e.f. 07/06/13 on payment of duty. The Ld. Advocate has categorically submitted that production of slurry concentrates commenced from 06/06/2013, even though the Central Excise registration was obta ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ificate for both these plants situated at 221 kms. away from each other. 8. Distinguishing the principle laid down M/s Jaypee Rewa Cement and M/s. Vikram Cements case, the Ld. Special Counsel submitted that unlike in the aforementioned cases, no input service or input or capital goods was ever used by them in any of their captive mines or in any process of manufacture and it had no nexus with the manufacture of dutiable iron oxide pellets at their Jajpur plant. In the present case, the duty paid capital goods, inputs and input services in question were received, installed and also used at the Barbil plant used in or in relation to the manufacture of exempted iron ore concentrates. It is submitted that since the Barbil Plant and the Jajpur Plant of the appellant cannot be construed as one and the same unit, therefore, credit on inputs, input services and capital goods cannot be admissible at their Jajpur plant. 9. Rebutting the contention of the appellant that the duty paid input services need not be received in the factory at Jajpur, to be eligible to CENVAT Credit, he has submitted that the undisputed fact is that the duty paid input services were received in their Barbil P ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ry defined at Section 2(e) of the CEA, 1944 and the scope of the word precincts as per the Collins English Dictionary, New Shorter Oxford English Dictionary and Black s Law Dictionary, 7th Edition, concluded that a single registration for these two separate plants situated at different places and engaged in manufacture of different products, classifiable separately under the Central Excise Tariff Act, 1985, cannot be granted. The Ld. Commissioner has recorded reasons at para 6.2 6.3 of the Order as: iron ore pellets are manufactured at Jajpur plant, and the manufacturing activity is an independent operation. Similarly the manufacturing of iron ore concentrates in the benefication plant is also an independent manufacturing operation with manufacturing of separate excisable goods i.e. iron ore concentrates.Manufacturing activity leading to manufacture of iron ore concentrates is in no way connected to the manufacturing activity of pellets. The iron ore concentrates are raw materials for manufacture of pellets. These are cleared independently and since are in slurry form are transported through pipeline of about 221 kms. Mere transportation of goods in a pipeline does not make t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 221 kms away would not make the two factories as one and the same. In our opinion also, the transfer of raw materials i.e. iron ore concentrate in slurry form through pipe line from Barbil factory to Jajpur Pellet factory cannot be construed that the Barbil plant is a captive plant of the Jajpur factory and entitled to a single Registration. 15. The next contention of the Ld. Advocate for the appellant is that in view of the judgment of the Honble Supreme Court in the case of Vikram Cement Vs. CCE, Indore-2006 (194) ELT (3) (SC) the input, capital goods and input services used in the manufacture of iron ore concentrate which are later transferred to their Jajpur plant for the use of manufacture of iron pellets, are eligible to CENVAT Credit at Jajpur factory. We do not find substance in the said contention of the Ld. Advocate in as much as facts and circumstances in Vikram Cements case and that of the facts of the present case are diagonally opposite. The Honble supreme Court in the case of Collector of Central Excise, Calcutta Vs. AL Noori Tobacco Products 2004(170) ELT 135(SC) emphasizing the necessity of care and caution in applying the principle of precedent observed as: ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ct, in deciding such cases, one should avoid the temptation to decide cases (as said by Cordozo) by matching the colour of one case against the colour of another. To decide therefore, on which side of the line a case falls, the broad resemblance to another case is not at all decisive. *** *** *** Precedent should be followed only so far as it marks the path of justice, but you must cut the dead wood and trim off the side branches else you will find yourself lost in thickets and branches. My plea is to keep the path to justice clear of obstructions which could impede it. 16. In the Vikram Cements case, their Lordships have been confronted with the issue whether duty paid on explosives and other inputs, capital goods used inthe mines situated at a distance from the factory for extraction of lime stone which were used in the manufacture of cement and klinkers classifiable under Chapter 25, are eligible to CENVAT Credit or other wise. 17. The facts of the present case are however, stands on a different plane. As narrated in their submission, the appellant receive iron ore fines(uneven sizes) from the mines which are stored in the Silos installed in the beneficatio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ooks of accounts at their Jajpur plant for its use at Barbil Plant, during the relevant period i.e. February ,2009 to August, 2010, however, they had taken Central Excise Registration for their Barbil plant on 26/11/2012 and the beneficiation plant became operational only from 06/6/2013. It is thus their contention that they are eligible to avail CENVAT Credit on the input, input services and capital goods used in or in relation to manufacture of iron ore concentrate w.e.f. 06/6/2013 at their Barbil plant, in the event the same are not admissible at their Jajpur plant. 20. Precisely, it is their submission that they had availed CENVAT Credit on the duty paid on input, input services and capital goods relating to Barbil plant at their Jajpur factory on theoretical basis in their books of accounts; but since the actual production of iron Ore Concentrate commenced from 06th June 2013, and cleared on payment of duty, they are eligible to avail and utilize the said CENVAT credit at their Barbil plant. 21. We find that this issue has been raised for the first time before this Tribunal and it is difficult to ascertain whether they have merely taken CENVAT Credit on their records ..... X X X X Extracts X X X X X X X X Extracts X X X X
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