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M/s N.S. Ispat Pvt. Ltd. Versus Commissioner of Central Excise, Raipur

2016 (1) TMI 884 - CESTAT NEW DELHI

Duty demand - cenvat credit - clearance of slag/dust cleared without payment of duty - Held that:- As from reading of sub-rule (2) and sub-rule (3) of Rule 6, it is clear that sub-rule (3) is applicable only when die provisions of sub-rule (2) are not complied with by a manufacturer. In this case, in course of manufacture of MS Ingots, slag dust arises as an inevitable by-product and in the present case, even if manufacturer, in accordance with the provisions of Rule 6 (2), wants to maintain sep .....

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in two separate processes. But complying with Rule 6 (2) is impossible where while manufacturing a product A, a product B emerges as an unavoidable by-product or as waste. Lex Non Cogit ad Impossibila is a well settled legal principle applicable in respect of taxation matters also. When it is impossible to comply with the provisions of sub-rule (2) of Rule 6, it would not be applicable. Sub-rule (3) of Rule 6 becomes applicable only when the manufacturer does not comply the provisions of sub-rul .....

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duty as same has been emerged during the course of manufacture of M.S. Ingots. - Decided in favour of assessee. - Excise Appeal No. 54209/2014-EX (DB) - Final Order No. A/53526/2015-EX(DB) - Dated:- 20-11-2015 - Ashok Jindal, Member (J) And B. Ravichandran, Member (T) For the Appellant : Shri Abhas Mishra, Adv For the Respondent : Shri R K Mishra, DR ORDER Per Ashok Jindal Heard both the sides. 2. The facts of the case are that the appellant are manufacturer of M.S. Ingots from sponge iron. In t .....

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goods (M.S. Ingots) and exempted goods (Slag dust) and they are not maintaining separate accounts for inputs/input services used in the manufacture of dutiable goods and exempted final products, in respect of clearance of slag dust an amount of 5% of the sale value of the slag dust cleared at nil rate of duty would be payable under Rule 6(3) of the Cenvat Credit Rules, 2004. It is on this basis that the Dy. Commissioner vide order-in-original dated 31.01.2014, confirmed the demand of ₹ 3,7 .....

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held that slag dust is marketable and excisable in view of the amended definition of excisable goods under-Section 2(d) of Central Excise Act, 1944. Against this order of the Commissioner (Appeals), this appeal has been filed. 3. Shri A. Mishra, the learned Consultant for the appellant pleaded that the provisions of Rule 6(2) and Rule 6(3) of Cenvat Credit Rules, 2004 are not applicable to this case as the slag dust emerges as inevitable and unavoidable waste, that in this case even if the manu .....

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57 CC would not be applicable in respect of mother liquor arising in the manufacture of gelatine, that the same view has been taken by Hon'ble Gujarat High Court in the case of CCE Vs. Nirma Ltd. - 2012 (281) ELT 654 (Gujarat) wherein the High Court has held that when the entire quantity of input was used in the manufacture of a dutiable final product and an exempted by-product emerges during the process of manufacture, there was no question of maintaining separate accounts or paying a perce .....

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judgements is squarely applicable to the facts of this case, and that in view of the above, the impugned order is not sustainable. 3. R.K. Mishra, ld, DR defended the impugned order by reiterating the findings of the Commissioner (Appeals) in the impugned order, and emphasized that slag dust emerging as by-product is an excisable goods in view of the clause (d) of Section 2 of Central Excise Act as the same was being sold and since it is full exempt from duty under Notification No.4/06-CE, it h .....

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hat there is no infirmity in the impugned order. 4. We have considered the submissions made from both the sides and perused the records. 5. The appellant are manufacturer of M.S. Ingots from sponge iron. In the course of manufacture of M.S. Ingots, slag dust arises which is waste and the same is fully exempt from duty under notification no.4/06-CE dated 1.3.2006. The Department's case against the appellant is that since the cenvat credit availed inputs have been used for manufacture of dutia .....

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services and manufacturers such final products or provides such output service which are chargeable to duty or tax as well as exempted goods or exempted services, then the manufacturer or provider of output service shall maintain separate accounts and inventory for the receipt and consumption of inputs and input service used in or in relation to the manufacture of exempted goods/exempted services and those used in or in relation to the manufacture of dutiable final products or providing exempte .....

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er sub-rule (3) who does not comply with the provisions of sub-rule (2) of Rule 6 is to pay an amount equal to 5% of sale value of the goods. Another option available is reversing proportionate cenvat credit as per the formula prescribed under Rule 6 (3A). However, from reading of sub-rule (2) and sub-rule (3) of Rule 6, it is clear that sub-rule (3) is applicable only when die provisions of sub-rule (2) are not complied with by a manufacturer. In this case, in course of manufacture of MS Ingots .....

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