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2015 (11) TMI 454 - CESTAT NEW DELHI

2015 (11) TMI 454 - CESTAT NEW DELHI - 2016 (332) E.L.T. 145 (Tri. - Del.) - Reversal of CENVAT Credit - Department initiated proceedings for recovery of the amount equal to 5% of the value of slag removed from factory in terms of Rule 6(3)(i) of the Cenvat Credit Rules, 2004 - Held that:- Appellant had set-up its factory with the intention to manufacture iron and steel products and slag generates involuntarily during such process. Since, the appellant never intended to manufacture the by-produc .....

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n favour of assessee. - Excise Appeal No. E/53271/2014-EX (SM) - Final Order No. A/52889/2015-SM(BR) - Dated:- 14-9-2015 - S. K. Mohanty, Member (J) For the Appellant : Shri Mayank Garg, Adv For the Respondent : Smt Ranjana Jha, JCDR ORDER Per S. K. Mohanty This appeal is directed against the impugned order dated 18.02.2014 passed by the Commissioner (Appeals-I), Customs & Central Excise, Raipur wherein cenvat credit of ₹ 4,47,858/-disallowed and equal amount of penalty imposed in the .....

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;slag' is generated in the process, which the appellant sells to its customers for a consideration. 2.2 During the disputed period, the Central Excise Department initiated proceedings for recovery of the amount equal to 5% of the value of slag removed from factory in terms of Rule 6(3)(i) of the Cenvat Credit Rules, 2004. The show cause notice issued in this regard was adjudicated vide order dated 26.07.2013, wherein the proposed Cenvat demand along with interest was confirmed and also equal .....

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of the Central Excise Act, 1944. Hence, according to the impugned order, removal of slag attracts payment of an amount equal to 5% of the clearance value. Feeling aggrieved with the impugned order, the appellant has filed this appeal before the Tribunal. 3. Shri Mayank Garg, the ld. Advocate appearing for the appellant interalia, submitted that during manufacture of M.S. Ingot, slag in the form of unavoidable waste is generated, which has no utility in the factory of the appellant; and on accum .....

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rities below, the ld. Advocate has relied on various judgments/decisions rendered by the judicial forums including the judgment of Hon'ble Bombay High Court, in the case of Rallis India Ltd. - Vs. - Union of India, reported in 2009 (233) ELT 301 (Bom.) and decision of this Tribunal in the case of Shree Balaji Ispat - Vs. - CCE, Raipur, reported in 2013 (290) ELT 120 (Tri.-Del.). 4. Per contra, Mrs. Ranjana Jha, the ld. JCDR appearing for the respondent submitted that since the cenvat credit .....

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s, 2004 mandates that credit of duty and service tax paid on inputs and input services respectively can be taken only if such inputs or input services are used in the manufacture of dutiable final product. Where input and input services are commonly used for manufacture of both dutiable final product as well as exempted final product, sub-rule (2) of the said rule provides that the manufacturer shall maintain separate accounts for receipt, consumption and inventory of input and input services me .....

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