Custom, Excise & Service Tax Tribunal
Cce (Ltu), Chennai vs M/S. Eid Parry (I) Ltd on 27 August, 2010
IN THE CUSTOMS, EXCISE & SERVICE TAX
APPELLATE TRIBUNAL
SOUTH ZONAL BENCH, CHENNAI
E/479/2008
(Arising out of Order in Appeal No. 7/08 dated 30.07.2008, passed by the Commissioner of Central Excise, (Appeals), Chennai).
For approval and signature
Honble JYOTI BALASUNDARAM, VICE PRESIDENT
_________________________________________________________
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CCE (LTU), Chennai : Appellant
Vs.
M/s. EID Parry (I) Ltd. : Respondent
Appearance Shri C. Dhanasekaran, SDR, for the appellant Shri M.V. Raman, Adv., for the respondent CORAM Ms. JYOTI BALASUNDARAM, VICE PRESIDENT Date of hearing : 27.08.2010 Date of decision : 27.08.2010 Final ORDER No._____________ The issue in dispute in the present appeal is admissibility of cenvat credit taken on inputs attributable to that portion of electricity transferred to the TNEB grid. According to the Revenue, proportionate credit is recoverable under Cenvat Credit Rules 14 and penalty imposable on the assessees in terms of Rule 15.
2. I have heard both sides. The case of the Revenue is based on Rule 6 (1) of the Cenvat Credit Rules, which applies in the case of common inputs being used both in the manufacture of exempted products as well as dutiable products. The issue now stands settled against the assesses by the decisions of the apex Court in CCE Vs. Solaris Chemtech Ltd. 2007 (214) ELT 481 (S.C.) and Maruti Suzuki Ltd. Vs. CCE 2009 (240) ELT 641 (S.C.), wherein the apex Court has held that credit is not admissible on inputs attributable to that portion of electricity wheeled out and not used in or in relation to manufacture of final products. The Ld. Counsel on the other hand submits that the stand of the assessees before the authorities which was not considered was that Cenvat Credit Rules 6(1) is not applicable in the facts of the present case as electricity is not exempted or not dutiable goods, but non-excisable commodity. Therefore, he submits that the decisions in Maruti Suzuki Ltd. and Solaris Chemtech Ltd., (supra) are distinguishable as it was not decided by the apex Court in these cases as to whether the provisions of cenvat credit Rules 6(1) would apply in the case of non-excisable commodity. However, since the issue stands settled by the apex Court decisions cited supra namely Maruti Suzuki Ltd. and Solaris Chemtech Ltd., I set aside the impugned order in so far as it relates to extending credit in or in relation to the electricity transferred to the TNEB grid, taken on inputs to that portion of electricity is admissible on quantum of electricity used in the manufacture of final products by the assessees. The prayer of the revenue for imposition of penalty on the assessees cannot be acceded to since in the case of Maruti Suzuki Ltd. itself, penalty has been set aside.
3. The appeal is thus partly allowed as above.
(Order dictated and pronounced in the open Court) (JYOTI BALASUNDARAM) VICE PRESIDENT BB 4