Facts
JSW Steel Limited, Bellary is engaged in the manufacture of Hot Rolled Coils, Sheets, Plates and Direct Reduced Iron. The appellant claims that it had become necessary to remove the impurities from the top gas which had emerged from the Reduction Shaft during the process of manufacture to ensure compliance of the directions issued by the Ministry of Environment and Forests. The top gas, according to the appellant, is refuse like dross and skimmings which are merely scum thrown out in the manufacture of aluminium sheets and have been held not to be manufactured goods.
It is for this reason that the appellant believed that central excise duty could not have been levied on the export gas that emerged after removal of impurities even if the export gas was supplied to Jindal Praxair Oxygen Company Pvt. Ltd. and JSW Energy Limited.
The demand has been confirmed by the orders impugned in these appeals holding that since the top gas that emerged from the Reduction Shaft had been subjected to a refining process for removal impurities, the process had resulted in changes that made the resultant export gas marketable which indicates that it was manufactured, an essential factor for levy of central excise duty.
Submissions
Vipin Jain and M.S. Nagaraja assisted by Vishal Agarwal, counsel for the appellant, submitted that the Export gas arose as a technological accident in the course of the manufacture of Direct Reduced Iron and the said gas is refuse like dross and skimmings, which are scum and have been held not to be manufactured goods.
P.R.V. Ramanan, special counsel for the department assisted by Rajiv Kumar, authorized representative for the department, Export gas is excisable and is nothing but Carbon Monoxide which is classifiable under Tariff Item 2811 29 40 of the Excise Tariff Act. The appellant has, while, contesting the excisability of the product, wrongly claimed classification of the said product under heading 2705.
Decision
The two member bench Justice Dilip Gupta President And R. Bhagya Devi Member (Technical) observed that the process undertaken on the top gas for removal of impurities to satisfy not only the conditions set out in the letter granting permission to the appellant for continuation and expansion of its manufacturing facilities but also to ensure compliance of the process design of the Technology supplier would not result in manufacture of the export gas. The Commissioner was, therefore, not justified in confirming the demand.
Case title: JSW Steel Limited v/s The Commissioner of Central Excise & Customs
Citation: Customs, Excise & Service Tax Appellate Tribunal Bangalore
