ORDER
T. Anjaneyulu, Member (J)
1. Heard both sides. The issue involved in all these appeals is common. Therefore, they are being taken up together and are being disposed of by a common order.
2. The appellants are manufacturers of pig iron as final product and availed Cenvat credit on furnace oil used as fuel in the factory. During the process of manufacture of pig iron, certain waste products i.e. blast furnace slag, coke breeze, etc. emerges. The contention of the department is that since un-granulated slag, coke breeze, etc. attracts nil rate of duty, the appellants are not eligible to Cenvat credit on the quantity of furnace oil used as fuel in the manufacture of un-granulated slag in terms of Rule 6(1) of Cenvat Credit Rules, 2002/2004. The Deputy Commissioner has passed order in original confirming the demand of Cenvat credit on the furnace oil used in the manufacture of final product. The order in original has been confirmed by the Commissioner (Appeals), Goa. Hence, these appeals.
3. The learned Counsel for the appellants contends that blast furnace slag or un-granulated slag, coke breeze/coke fines are not final products and they are only the waste materials arising as by-product during the process of manufacture of pig iron. It is well settled position in law that slag is not excisable goods and therefore, the question whether slag is exempted or dutiable does not arise. According to him Rule 6(3) of Cenvat Credit Rules, 2004 is not in issue. In this context, he cites and relies upon the decision in the case of JSW Steel Limited v. CCE, Belgaum Final Order No. 1036/2006, dated 8-6-2006 [2006 (205) E.L.T. 896 (Tribunal)] which upheld the above view. Further, he relies upon the decisions in the case of CCE, Surat v. United Phosphorus Ltd. 2006 (75) RLT 94 (Tri.-Mum.), Tata Metaliks Ltd. v. CCE, Kolkata-II and Hindustan Zinc Ltd. v. CCE 2004 (173) E.L.T. 131 (T) canvassing on the point that slag is not excisable goods which is emerging as waste product during the process of manufacture of pig iron. He is also relying upon the Board’s Circular F.No. 267/136/87-CX.8, dated 15-1-1988 which has clarified that the slag which is generated in the course of manufacture of copper and articles thereof is a waste which would be covered under the provisions of Rule 57D. Accordingly, it is clarified that the duty on the inputs should not be denied on the ground that part of the inputs is contained in the slag and other invisible losses. Further, he refers to CBEC Circular No. 56/2003-Cus., dated 27-6-2003 wherein it has clarified that the coke breeze cannot be charged to the blast furnace as it clogs the blast furnace and adversely affect the manufacturing process and the quality of final product. Therefore, the coke breeze could be treated as a process waste.
4. In view of the submissions made by the learned Counsel for the appellants and decisions cited including Board’s Circulars, I am of the view that no demand of Cenvat credit on the input is sustainable. The impugned orders passed by both the authorities below are erroneous and are liable to be set aside. Accordingly, the impugned orders are set aside. In the result, the appeals are allowed with consequential relief, if any, to the appellants.
(Pronounced in the Court)