TMI Blog2015 (12) TMI 1491X X X X Extracts X X X X X X X X Extracts X X X X ..... ng - Undeniably, iron ore lumps are costlier than iron ore as such. It is the choice of the manufacturer to obtain iron ore and get into crushed lumps. Therefore, disallowance of credit on the ground that short quantity is not used in or in relation to the manufacture of final products, is not sustainable. Further, Rule 3(5) of Cenvat Credit Rules ,2004 speaks about inputs and capital goods and does not mention input service. - denial of credit is unsustainable. In the result, the impugned order, is set aside - Decided in favour of assessee. - Appeal No. E/50164/2015-SM - Final Order No.53237/2015 - Dated:- 26-10-2015 - Smt.Sulekha Beevi C.S., Member (Judicial) For the Petitioner : : Shri Manish Saharan, Advocate For the Res ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sired size. The raw material cannot be directly used in the production stream. In order to make raw materials into iron ore lump suitable for manufacture, the appellant sends the raw material to job worker. The job worker crushes the entire raw material and sends back the iron ore lumps suitable for manufacture to the factory of the appellant. The job worker receives charges for service of crushing the iron ore and service tax is also paid by the appellant. The appellant then availed credit of service tax paid on the input services. During the process of crushing some portion turns out to waste which cannot be used for manufacture of sponge iron. The credit is denied by department by referring to sub-rule (5) of Rule 2 of Cenvat Credit Rule ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... me quantity of iron ore changes to waste unfit for use in manufacture. It is impossible for the appellant to segregate and ascertain how much quantity would turn out to be waste or unfit for use in manufacture in the process of crushing. The segregation of the quantity unfit for manufacture happens only after the process of crushing. The appellant has to send the entire quantity of raw materials and pay charges for the services alongwith service tax. It is the discretion of the manufacture either to purchase iron and get it crushed to get the lumps or to directly purchase iron ore lumps suitable for manufacture depending on the type of the plant and machinery installed. Undeniably, iron ore lumps are costlier than iron ore as such. It is th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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