TMI Blog2016 (10) TMI 651X X X X Extracts X X X X X X X X Extracts X X X X ..... e (GTA) credit has been taken and used for dutiable final product (sponge iron) and exempted final product (iron ore fines) - whether reversal justified? - Held that: - the decision in the case of Union of India Vs. Hindustan Zinc Ltd. [2014 (5) TMI 253 - SUPREME COURT] relied upon where it was held that a distinction has to be made between final product as well as by-products. It was held that by-products cannot be held to be main final products. The court was examining the question of reversal in the context of Rule 57CC as well as Rule 6 of the Cenvat Credit Rules, 2004 and decided that for clearance of exempted by-products there will be no need for reversal of 8%/10% of the value of the exempted products. Generation of electricity in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nabhan, Member ( Technical ) Mr. K. K. Anand, Advocate For Appellant Mr. G. R. Singh, DR For Respondent ORDER Per Mr. V. Padmanabhan The present appeal has been filed against Order-in-Original dated 24.09.2008 passed by Commissioner of Central Excise Customs, Raipur. The appellant is engaged in the manufacture of sponge iron falling under heading 7203 of the Schedule to the Central Excise Tariff Act, 1985. They were availing Cenvat credit on input and input services. They were also paying service tax on transportation of goods inputs as well as final products and were also availing Cenvat credit on such service tax. The demand made in the impugned order is to the extent of ₹ 3,19,48,674/- along with interest a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ity wheeled out to Chhattisgarh Electricity Board). 2. The appellant challenged the impugned order mainly on the following grounds:- (i) Iron ore fines is not a final product, which is exempted, but is a by-product which has emerged during the course of manufacture of sponge iron. Unintended by-products cannot be treated as final product and hence will not fall in the category of exempted goods. Consequently, there is no need to reverse 10% of the value of the exempted goods in terms of Rule 6 (3) ibid. They have cited the following case laws in their support:- (i) Union of India Vs. Hindustan Zinc Ltd. [2014 (303) ELT 321 (SC) (ii) Rallis India Ltd. Vs. Union of India [2009 (233) ELT 301 (Bom.)] (iii) CCEST, Raipur Vs. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he appellant and Shri GR Singh, ld. Departmental Representative for Revenue. 5. The appellant has used iron ore as the main input in the manufacture of sponge iron and have taken credit of service tax paid on input services (GTA). In the course of processing of iron ore, another product, iron ore fines emerged, which was cleared and sold without payment of duty since the same enjoyed exemption. It is not disputed that they have not maintained separate accounts for the use of common input services for dutiable and exempted products. In the impugned order, the Commissioner is of the view that the appellant had cleared two final products, i.e., one dutiable (sponge iron) and the other exempted (iron ore fines). For failure to maintain separ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e find that this controversy can be decided without getting into the question of whether electrical energy is excisable goods or exempted goods. We find that the appellant has reversed the entire credit taken on input services, namely, GTA services in respect of transportation of coal, even though part of the coal was used in the manufacture of dutiable sponge iron. Hon'ble Supreme Court in the case of Chandrapur Magnet Wires (P) Ltd. Vs. Collector of Central Excise, Nagpur has held that if the credit originally availed is reversed subsequently it would amount to the effect as if no credit has been availed. Accordingly, we find no justification to demand 10% of the value of electricity wheeled out. 7. Ld. Departmental Representative ..... X X X X Extracts X X X X X X X X Extracts X X X X
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