Custom, Excise & Service Tax Tribunal
Phillips Carbon Black Ltd vs C.C.E-Bharuch on 15 September, 2016
In The Customs, Excise & Service Tax Appellate Tribunal West Zonal Bench At Ahmedabad Case No Impugned Order Detail's Date of Impugned Order Passed By Appellant Respondent
E/1207/2011-SMC OIA-COMMR-A--327-VDR-II-2011 25/08/2011 Commissioner (Appeals), C.Ex. & S.Tax, Vadodara Phillips Carbon Black Ltd C.C.E-Bharuch E/242/2012-SMC OIA-COMMR-A--47-49-VDR-II-2012 30/01/2012 Commissioner (Appeals), C.Ex. & S.Tax, Vadodara Phillips Carbon Black Ltd C.C.E-Bharuch E/243/2012-SMC OIA-COMMR-A--47-49-VDR-II-2012 30/01/2012 Commissioner (Appeals), C.Ex. & S.Tax, Vadodara Phillips Carbon Black Ltd C.C.E-Bharuch E/244/2012-SMC OIA-COMMR-A--47-49-VDR-II-2012 30/01/2012 Commissioner (Appeals), C.Ex. & S.Tax, Vadodara Phillips Carbon Black Ltd C.C.E-Bharuch Represented by:
For Appellant: Shri Rahul Gajera, Advocate For Respondent: Shri L. Patra, A.R. For approval and signature:
Honble Dr. D.M. Misra, Member (Judicial)
1. Whether Press Reporters may be allowed to see the No Order for publication as per Rule 27 of the CESTAT (Procedure) Rules, 1982?
2. Whether it should be released under Rule 27 of the CESTAT (Procedure) Rules, 1982 for publication in any authoritative report or not?
3. Whether their Lordships wish to see the fair copy of Seen the order?
4. Whether order is to be circulated to the Departmental Yes authorities?
CORAM:
HONBLE DR. D.M. MISRA, MEMBER (JUDICIAL) Date of Hearing/Decision:15.09.2016 Order No.A/10915-10918/2016, dt.15.09.2016 Per: Dr. D.M. Misra Heard both sides and perused the records.
2. These appeals are filed against the respective OIAs passed by Commissioner (Appeals), Cental Excise & Service Tax, Vadodara.
3. Briefly stated the facts of the case are that the Appellants are engaged in the manufacture of Carbon Black. They had availed CENVAT Credit - during the period 2004 to 2011 on installed capital goods exclusively used for generation of electricity, a part of which are consumed in the manufacture of carbon black and part of which sold to M/s Adani Exports Ltd through Gujarat State Electricity Board. Demand notices were issued, alleging that the amount of CENVAT Credit availed was inadmissible to them as per Rule 6(4) of CENVAT Credit Rules, 2004. The demands were confirmed and penalty of equivalent amount in each case imposed under Rule 15 of CENVAT Credit Rules, 2004 read with Section 11AC of Central Excise Act, 1944. Aggrieved by the said orders, the Appellants preferred appeals before the learned Commissioner (Appeals), who in turn, rejected their appeals. Hence, the present appeals.
4. The learned Advocate Shri Rahul Gajera for the Appellant submits that the electricity generated using the capital goods installed in the factory is not exclusively sold, but major portion of it was captively consumed in the manufacture of finished goods, hence, Rule 6(4) of CENVAT Credit Rules 2004 is not attracted. In support, he has referred to the judgment of Hon'ble Gujarat High Court in the case of CCE Vs United Phosphorous Ltd - 2015 (315) ELT 360 (Guj).
5. The learned Authorised Representative for the Revenue reiterates the findings of the learned Commissioner (Appeals).
6. It is not in dispute that the major portion of the electricity generated was used in the manufacture of dutiable goods viz. carbon black. Thus, it is clear that the capital goods installed are not exclusively used in the manufacture of finished goods which are exempted from duty. The aforesaid issue is considered by Hon'ble Gujarat High Court in United Phosphorous Ltd case, albeit in the erstwhile Rule 57Q of Central Excise Rules 1944, however, the same is relevant in deciding the issue in the new set of rules also. In the said judgment, the Hon'ble Court, referring to the judgment of this Tribunal in the case of Kothari Sugars & Chemicals Ltd Vs Commissioner 2006 (196) ELT 35 (Tri.) and the decision of Hon'ble Supreme Court in the case of Solaris Chemtech Ltd 2007 (214) ELT 481 (SC), held that since the electricity generated by the Appellant was not totally sold outside but partly consumed captively, therefore, the CENVAT Credit availed on the capital goods cannot be denied. Following the aforesaid decision, I have no hesitation to hold that the Appellants are eligible to CENVAT Credit on capital goods installed in the factory for generation of electricity, which in turn, used in the manufacture of carbon black even though a part of it sold to M/s Adani Exports Ltd through Gujarat State Electricity Board.
7. Consequently, the impugned orders are set aside and the appeals are allowed with consequential relief, if any, as per law.
(Dictated and pronounced in the open court) (Dr. D.M. Misra) Member (Judicial) Cbb 4