M/s. Shivratna Udyog Ltd. Versus Commissioner of CGST & CX, Pune II
Central Excise
2018 (11) TMI 1513 – CESTAT MUMBAI – TMI
CESTAT MUMBAI – AT
Dated:- 20-11-2018
Appeal No. E/86537/2018 – A/87964/2018
Central Excise
Dr. Suvendu Kumar Pati, Member (Judicial)
Shri J.N. Somaiya, Advocate for the appellant
Shri D.S. Chavan, AC (AR) for the respondent
ORDER
Explanation 1 inserted to Rule 6(1) of Cenvat Credit Rules 2004 with effect from 01.03.2015 is held to be applicable to the electricity sold by the appellant that was being generated from bagasse, a waste product of sugar manufacturing and imposition of duty liability thereon by invoking Rule 6(3A) of Cenvat Credit Rules 2004 is under challenge before this Tribunal.
2. Factual backdrop of the case is that appellant is a manufacturer of sugar and molasses falling under chapter 17 of the Schedule to the Central Excise Tariff Act, 1985. It has a power generation plant in its factory where electricity is generate
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dmitted in the case of Gularia Chini Mills 2014 (34) STR 175 (HC-All) before the Hon'ble Allahabad High Court that bagasse were neither input nor input service used for generation of electricity and the same had attained finality in the decision of the Hon'ble Supreme Court reported in 2015 (322) ELT 769 (SC) in the case of DSCL Sugar Ltd. case. It was also held that since provision of Rule 6 is not for bagasse, the same will not apply to electricity generated by using bagasse only when no other input is used. Ld. Counsel for the appellant further submitted that department had not produced any evidence to prove use of any common input/ input services of the manufacture of dutiable goods for non-excisable electricity production for which he prays to set aside the order of the Commissioner (Appeals). He placed his reliance on the reported judicial decisions referred below:-
i) Jakarya Sugars Ltd. 2018 (5) TMI-1665 (Tri-Mum)
ii) Final order no. A/89563-89568/17/SMB dated 04.08.2017
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or input services used for generation of electricity to the extent duty free electricity is sold. Assessee is not eligible to take any cenvat credit of such inputs and input services having nexus with generation of electricity sold.
5. Heard from both sides at length. Perused the case records and the relevant decisions cited by the adversaries which are mostly related to the incidence prior to the insertion of proviso-1 to Cenvat Credit Rules wef. 01.03.2015 except Jakarya Sugars Ltd. Admittedly electricity, though not found in tangible form, is classifiable under Tariff item no. 27160000 of Central Excise Tariff Act, 1985. But it is a non-excisable goods and the process of generation of electricity though a manufacturing process is dutiable if it is generated from mineral oils, bitumen substance, mineral waxes etc. and electricity generated from bagasse is not covered under Chapter 27 like electricity generated through solar power, hydro power, wind power etc. Therefore, as has been
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