CENVAT credit on transportation of waste generated in processing of iron ore is eligible - Rule 3(5) of CCR not applicable to 'input service'

Seven Star Steel Ltd. Vs. Commissioner of central Excise, Coustoms & S.T. – BBSR –II- 2013 (30) S.T.R. (Tri – Kolkata )

Facts:

The appellant engaged in the manufacture of sponge iron availed CENVAT credit of GTA service in respect of iron ore fines generated in the process of screening and were in the nature of unavoidable waste which fetched some price when sold in the market. The

revenue contended to reverse the said credit. The Appellant submitted that in terms of the CENVAT Credit Rules, 2004, the credit on input services, cannot be denied on the ground that some part of the input is contained in the waste. Rule 3(5) further prescribed reversal of CENVAT credit on removal of inputs or capital goods which in the present case does not apply.

Held:

The Tribunal allowed the appeal and held that input iron ores were subjected to the process of screening which was a part of the manufacturing process. After the process the same could not be called as input as such. The Tribunal further held that Rule 3(5) of the CENVAT Credit Rules,2004 directed for reversal of CENVAT credit on inputs or capital goods and the same is not applicable on input services.