BRAHMANI RIVER PELLETS LTD. Vs. COMMR. OF C. EX., CUS. & S.T., BBSR-I
LAWS(CE)-2015-6-32
CUSTOMS EXCISE AND GOLD(CONTROL) APPELLATE TRIBUNAL
Decided on June 11,2015

Brahmani River Pellets Ltd. Appellant
VERSUS
Commr. Of C. Ex., Cus. And S.T., Bbsr -I Respondents


Referred Judgements :-

LONDON GRAVING DOCK CO. LTD. V. HORTON [REFERRED TO]
PARLIAMENT." AND,IN HERRINGTON V. BRITISH RAILWAYS BOARD [REFERRED TO]
J.R. HERBAL CARE INDIA LTD. V. COMMR. OF CENTRAL EXCISE,NOIDA [REFERRED TO]
JAYPEE REWA CEMENT VS. COMMISSIONER OF CENTRAL EXCISE M P [REFERRED TO]
COLLECTOR OF CENTRAL EXCISE CALCUTTA VS. ALNOORI TOBACCO PRODUCTS [REFERRED TO]
VIKRAM CEMENT VS. COMMISSIONER OF CENTRAL EXCISE [REFERRED TO]
VIKRAM CEMENT VS. COMMNR OF CENTRAL EXICSE INDORE [REFERRED TO]
SOUTH EASTERN COALFIELDS LTD VS. COMMISSIONER CUSTOMS AND CENTRAL EXCISE M P [REFERRED TO]
DEEPAK FERTILIZERS AND PETROCHEMICALS CORPORATION LTD VS. COMMISSIONER OF CENTRAL EXCISE [REFERRED TO]
CENTRAL COALFIELD LTD. VS. COMMISSIONER OF C. EX., JAMSHEDPUR [REFERRED TO]


JUDGEMENT

DR.D.M.MISRA, J. - (1.)THIS is an appeal filed against Order -in -Original No. CCE/BBSR -I/05/2011, dated 30 -6 -2011 passed by the Commissioner of Central Excise, Bhubaneswar -I. Briefly stated the facts of the case are that the appellant having its factory at Jajpur, Orissa engaged in the manufacture of iron oxide pellets falling under Chapter 26 of CETA, 1985. A Show Cause Notice was issued to them alleging that the appellant had irregularly availed Cenvat credit at their Jajpur Plant amounting to Rs. 5,61,96,857/ - during the period from November, 2009 to August, 2010 on inputs, capital goods and input services received and used in their beneficiation plant at Barbil. It was alleged that since the inputs, capital goods and input services were used in their beneficiation plant, a separate factory, situated at a different and demarcated place, around 221 kms. away from Jajpur plant, therefore, the Cenvat credit is not admissible at their factory at Jajpur. Further, it is alleged that since the said inputs, capital goods and input services were not used in their factory at Jajpur but used at Barbil in their beneficiation plant in or in relation to the manufacture of Iron Ore Concentrate, exempted under Notification No. , dated 1 -3 -2006, hence not eligible to Cenvat credit in view of Rule 6(1) and Rule 6(4) of Cenvat Credit Rules, 2004. The ld. Commissioner on adjudication, confirmed the demand and imposed penalty of Rs. 2.00 Crores under Rule 15(1) of the Cenvat Credit Rules, 2004. Hence the present appeal.
(2.)Advancing the argument on behalf of the appellant, the Ld. Advocate Shri S.C. Mohanty for the appellant had submitted that in order to use the iron ore obtained from mines by subjecting to the process like crushing, screening, sizing, etc. known as beneficiation process, a separate plant had been set up at Barbil around 221 Kms. away from their Jajpur factory. He has submitted that the 'iron ore concentrate' manufactured in the beneficiation plant is classifiable under Chapter Sub -Heading 26011150 of CETA, which is an intermediate product for the manufacture of their final products i.e. Iron oxide pellets at Jajpur plant. He submits that the inter -mediate product is transferred from the Barbil plant to Jajpur in slurry form through specially designed pipeline and the entire quantity of slurry concentrates are consumed in their Jajpur plant for manufacture of iron oxide pellet and not cleared/sold to any one else.
(3.)IT is his submission that Cenvat credit availed on capital goods used for manufacture of exempted inter -mediate product i.e. iron ore concentrate which had been ultimately used in the manufacture of dutiable products, is admissible to Cenvat credit in view of C.B.E. & C. Circular No. , dated -25 -9 -2002. The said circular of the Board does not qualify that the intermediate product has to be manufactured within the factory producing the final product. It is his submission that the beneficiation plant at Barbil is their Captive plant and the process carried out there is integral to and inter -linked with the manufacture of iron oxide pellet at Jajpur, hence Cenvat credit availed on the inputs, capital goods and input services used in Barbil Plant are admissible. In support, he has referred to the decision of Hon'ble Supreme Court in Jaypee Rewa Cement v. CCE - : 2001 (133) E.L.T. 3 (S.C), Vikram Cement v. CCE - : 2005 (187) E.L.T. 145 (S.C.) and : 2006 (194) E.L.T. 3 (S.C).
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