2018 (11) TMI 913 – CESTAT BANGALORE – TMI – CENVAT Credit – part of electricity used for captive consumption – demand equal to 6% of the sale value of the electricity sold during the period from March 2015 to December 2015 – Held that:- The issue is no more res integra and has been settled by the decision of the Allahabad High Court in the case of Gularia Chini Mills [2013 (7) TMI 159 – ALLAHABAD HIGH COURT], wherein it has been held that there cannot be a demand of 6% of the value of exempted electricity sold outside the factory in terms of Rule 6(3) (i) of CCR simply on the ground that the appellant has failed to maintain separate account on receipt of input or input services used in the manufacture of dutiable goods, namely, Sugar and exempted goods, namely, electricity.
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The demand of 6% of the value of electricity sold to various companies is not sustainable in law – appeal allowed – decided in favor of appellant. – E/20986/2018; E/20988/2018; E/20453/2018 & E/20820/2018 –
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ithin the factory by them in or in relation to the manufacture of their final product i.e., sugar and only the remaining portion of the electricity after their captive consumption is sold to outside agency for a consideration. Appellants were issued show-cause notice dated 31.3.2016 demanding an amount of ₹ 55,65,810/- i.e. equal to 6% of the sale value of the electricity sold during the period from March 2015 to December 2015 under Rule 14 of CENVAT Credit Rules, 2004 read with Section 11A(1)(a) of Central Excise Act, 1944 along with interest and penalty is also proposed under Section 11AC. After following the due process, the Joint Commissioner vide Order-in-Original dated 28.2.2017 confirmed the demand for an amount of ₹ 55,65,810/- under Section 11A(1) of Central Excise Act, 1944 read with Rule 14 of the CENVAT Credit Rules, 2004 and imposed penalty of ₹ 5,56,581/- under Rule 15(1) of the CENVAT Credit Rules and has also ordered for recovery of interest under Sect
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lectricity sold by them during the material period of dispute in terms of provisions of Rule 6(3)(i) of CCR, 2004. Consequently, the Revenue has demanded 6% of the amount of the value of electricity sold to other companies. He further submitted that Revenue in the show- cause notice has merely alleged that the appellant has used common input or input services like water treatment chemicals, lubricating oil and GTA, security, manpower supply, maintenance and repair, telephone, courier, Chartered Accountant, insurance service, have been used commonly in the manufacture of dutiable final product and non-excisable electricity. But no justification, evidence or reasoning is provided in support of this bald allegation given in the show-cause notice itself. He further submitted that in the absence of any material evidence to show that the appellants have used common inputs or input services in the generation of electricity, then there is no question of application of provisions of Rule 6(2)/6
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admitted before the High Court that except the bagasse no other input or input service is used for generation of electricity and the said decision of Gularia Chini Mills has been upheld by the Hon ble Supreme Court in the case of DSCL Sugars Ltd. reported in 2015 (322) ELT 769 (SC). He further submitted that the process of generation of electricity by using the bagasse consumed in all the sugar factories in India and once the Department has admitted in the Gularia Chini Mills that no input or input service except bagasse are used in generation of electricity, then the stand taken by the Revenue in the present appeals is not tenable in law. He further submitted that the amended Rule 6 which is effective from 1.3.2015 is not applicable to bagasse. For this submission, he relied upon the following decisions: Simbhaoli Sugar Ltd. vs. CCE: 2018 (8) TMI 160 Triveni Engineering & Industries Ltd. vs. CCE: 2018 (8) TMI 6 Final Order No. A/89563-89568/17/SMB dt. 4.8.2017 passed by CESTAT, W
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this, he relied upon the following decisions: Cranes & Structural Engineers vs. CCE: 2017 (347) ELT 112 Aster Pvt. Ltd. vs. CCE: 2016 (43) STR 411 Swaraj Automotive vs. CCE: 2018 (9) TMI 982 Furnace & Foundry Equipment Co. vs. CCE: 2018 (2) TMI 1011 Rajdeep Plastics Containers (I) Pvt. Ltd. vs. CCE: 2017 (11) TMI 338 5. On the other hand, the learned AR defended the impugned order and submitted that as per the decision of the Mumbai Tribunal in the case of Sharad S.S.K. Ltd. vs. CCE, Kolhapur: 2017 (49) STR 506 (Tri.-Mum.) wherein the Tribunal has held that the appellants are liable to reverse the credit, if any, taken on inputs/input services which have been used in the generation of electricity which have been sold to MSEB. 6. After considering the submissions of both the parties and perusal of the material on record, I find that the issue involved in the present appeals is no more res integra and has been settled by the decision of the Allahabad High Court in the case of Gu
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