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TMI Blog2020 (6) TMI 416X X X X Extracts X X X X X X X X Extracts X X X X ..... ing the facility of the Cenvat credit of the central excise duty paid by them on inputs, capital goods and service tax paid by them on input services as per the provisions of the Cenvat Credit Rules, 2004. The Department has been of the view that in the manufacture of the sponge iron, iron ore lumps of different sizes are first subjected to crushing and thereafter iron ore fines are taken out and screened. During the course of screening of the iron ore fines certain quantities of iron ore fines which are in the powder form further cannot be used for manufacture of the sponge iron. These quantities of iron ore fines in the form of powder are being sold by the appellant to other persons, however, no central excise duty has been paid nor any r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e fines emerging during the process of the manufacture is not a manufacture goods and, therefore, not excisable and therefore he held that the provisions of Rule 6 (3) of the Cenvat Credit Rules, 2004 are not applicable in this case. 2. The Department has preferred an appeal against the above-mentioned order-in-original of the Assistant Commissioner before Commissioner (Appeals). The learned Commissioner (Appeals) vide his order-in-appeal No. BHO-EXCUS-002-APP-24218-19 dated 11 July 2018 has allowed the appeal of the Department holding that the appellant are required to reverse Cenvat credit as provided under Rule 6 (3) (i) of the Cenvat Credit Rules, 2004 on the value of the iron ore fines cleared by them. The learned Commissioner (Appeal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed up to this stage. When the show cause notice and the order-in-original do not even mention as to which common Cenvat credit availed inputs/input services have been used up to the stage of crushing of Iron Ore at which stage Iron Ore Fines emerge, on this very ground itself, the demand under Rule 6(3) would be liable to be set aside. Moreover in this case, even if, there are some common inputs/input services and the assessee wants to comply with the provisions of sub-rule (2) of Rule 6 by maintaining separate account and inventory of input and input services meant for dutiable and excisable product, it is not possible as the Iron Ore Fines emerge as an unavoidable and inevitable by-product. The provisions of Rule 6(2) read with Rule 6(3) ..... X X X X Extracts X X X X X X X X Extracts X X X X
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