HARIYANA STEEL AND POWER Vs. COMMISSIONER OF C. EX., CUS. & S.T., MYSORE
CUSTOMS EXCISE AND GOLD(CONTROL) APPELLATE TRIBUNAL
Hariyana Steel And Power
Commissioner Of C. Ex., Cus. And S.T., Mysore
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ARCHANA WADHWA,MEMBER (J) -
(1.)Both the appeals are being disposed of by a common order as they arise out of same impugned order passed by the authorities below. As per facts on records, the appellants are engaged in the manufacture of sponge iron falling under Chapter 72 of the Schedule to the Central Excise Tariff Act. During the course of manufacture of their final product, slag comes into existence, which is a by -product or a waste liable to nil rate of duty. Since the said slag is being sold by the appellant for a value, Revenue was of the view that the same are excisable goods, after the amendment in Sec. 2(d) of the Central Excise Act, and the appellant is required to pay an amount equal to 5%/10% of their value as per Rule 6(3)(i) of Cenvat Credit Rules, 2004. For arriving at the above conclusions, the lower authorities have referred to an addition of Explanation in the provision of Sec. 2(d) of the Central Excise Act laying down that if for the purpose of this clause, goods include any article, material or substance which is capable of being bought and sold for a consideration and in such case shall be deemed to be marketable. As such, lower authorities by relying upon the said provisions as also to the Board's Circular No. , dated 28 -10 -2009, confirmed the demands in the present cases.
(2.)Learned advocate appearing for the appellant draws my attention to the Hon'ble Bombay High Court decision in the case of Rallis India Ltd. -, 2009 -TIOL -16 -HC -MUM -CX :, 2009 (233) E.L.T. 301 vide which the Larger Bench decision of the Tribunal was set aside by observing that there is no requirement of reversal of 10% of the value of the final exempted by -product in case of use of common inputs, inasmuch as the by -product cannot be held to be excisable goods manufactured by the assessee. To the same effect the Hon'ble Supreme Court's decision in the case of UOI v/s. Hindustan Zinc Ltd. - : 2014 -TIOL -55 -SC -CX : 2014 (303) E.L.T. 321 (S.C.) laying down that Rule 6 of the Cenvat Credit Rules will not apply in case of clearance of exempted by -products. As such, he submits that inasmuch as the slag is admittedly a by -product of sponge iron, the decisions would apply and the Revenue cannot ask for payment of 10% or 5% of the value of the said exempted products.
(3.)Countering the arguments learned DR submits that the said decisions are not applicable to the facts of the present case inasmuch as the same are for the period prior to amendment in Sec. 2(d). As such, he supports the impugned orders. After carefully considering the submissions made by both sides, I find that only difference in the facts of the present case and the decisions relied upon by the learned advocate is the addition of Explanation to Sec. 2(d) of the Central Excise Act, w.e.f. 10 -5 -2008. However, I find that the Board's Circular No. , dated 28 -10 -2009 strongly relied upon by the lower authorities stands struck down by the Hon'ble Allahabad High Court in the case of Balrampur Chini Mills Ltd. v/s. UOI reported as : 2014 (300) E.L.T. 372 (All.). Further, vide a recent decision, the Hon'ble Bombay High Court in the case of Hindalco Industries Ltd. - : 2015 (315) E.L.T. 10 (Bom.) has set aside the Larger Bench decision of the Tribunal reported at : 2014 (308) E.L.T. 472 (Tri. -LB) and has observed that the amendment in Sec. 2(d) will not change the scenario inasmuch as the manufacture of waste, refuse, scrap, etc., cannot be considered to be manufactured items in terms of Sec. 2(f) of the Central Excise Act.
3.1 In view of the above, I am of the opinion that the amendment in Sec. 2(d) has not changed the scenario. Accordingly, the law declared in the above decisions of the Hon'ble Supreme Court and the Hon'ble Bombay High Court would apply, read with the decisions of the Hon'ble Allahabad High Court. The impugned orders are accordingly set aside and both the appeals are allowed with consequential relief to the appellants.
(Order pronounced in open Court)
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