Custom, Excise & Service Tax Tribunal
Commissioner Of Central Excise, ... vs Shree Datta Ssk Ltd on 13 November, 2014
IN THE CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL WEST ZONAL BENCH AT MUMBAI COURT No. I APPEAL Nos. E/1304 to 1307/09-Mum (Arising out of Order-in-Appeal No. PII/PAP/160-163/2009 dated 19.8.2009 passed by Commissioner of Central Excise (Appeals), Pune-II) For approval and signature: Honble Mr. Ashok Jindal, Member (Judicial) and Honble Mr. P.K. Jain, Member (Technical) ======================================================
1. Whether Press Reporters may be allowed to see : No the 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 : Seen of the Order?
4. Whether Order is to be circulated to the Departmental : Yes authorities?
====================================================== Commissioner of Central Excise, Kolhapur Appellant Vs. Shree Datta SSK Ltd. Respondent Appearance: Shri Ashutosh Nath, Assistant Commissioner (AR), for appellant Shri V.B. Gaikwad, Advocate, for respondent CORAM: Honble Mr. Ashok Jindal, Member (Judicial) Honble Mr. P.K. Jain, Member (Technical) Date of Hearing: 13.11.2014 Date of Decision: 13.11.2014 ORDER NO Per: Ashok Jindal
The Revenue has filed these appeals against the impugned order wherein the learned Commissioner (Appeals) has dropped the demands against the respondents confirmed by the Joint Commissioner of Central Excise, Pune.
2. The brief facts of the case are that the respondents are engaged in the manufacture of sugar and molasses and have availed cenvat credit of inputs and input services pertaining to manufacture of both dutiable and exempted goods without keeping separate accounts and also did not pay the amount equal to 10% of the price of the exempted goods in terms of Rule 6 of the Cenvat Credit Rules, that the bagasse which was extracted from the sugarcane was burnt in the boiler as fuel and steam is generated and for generation of steam, de-mineralized water is used in the boiler initially, that the steam generated in the boiler using DM water is used in the turbine for generation of electricity, that the electricity generated is used captively for manufacturing process and sold to Maharashtra State Electricity Distribution Col Ltd. (MSEDCL). In this set of facts, the contention of the Revenue is that as electricity which has been cleared to MSEDCL without payment of duty, is an exempted goods and the same has been manufactured by using dutiable inputs and input services on which cenvat credit has been availed by the respondents, therefore as per Rule 6(3) of the Cenvat Credit Rules, as they are not maintaining separate accounts of inputs/input services to be used in the manufacture of dutiable as well as exempted goods, the respondents are required to pay 10% of the amount of electricity cleared by them. Initially, show cause notices were issued to the respondents and the demands were confirmed. The said orders were challenged before the learned Commissioner (Appeals) who set aside the adjudication order and allowed the appeals. Against this order, the Revenue is before us.
3. The learned AR representing the Revenue submits that as electricity is exempted from payment of duty and all the inputs have been used by the appellant for generation of electricity, therefore the respondents are required to pay 10% of the amount of electricity cleared by them as duty as per Rule 6(3) of the Cenvat Credit Rules. To support his contention, he relied on the decision of the Tribunal in the case of CCE, Kolkata vs. MCC PTA India Corpn. Pvt. Ltd. reported in 2009-TIOL-2466-CESTAT-KOL and the decision in the case of Sanghi Industries Ltd. vs. CCE, Rajkot reported in 2014-TIOL-996-CESTAT-AHM.
4. On the other hand, the learned counsel appearing on behalf of the respondents relies on the decision of this Tribunal in the case of CCE vs. Valplus Biotech Ltd.& other reported in 2013 (10) TMI 939, CCE, Tirunelveli vs. Ramesh Flowers (P) Ltd. reported in 2009 (236) ELT 366 (Tri.-Chennai) and the decision of the Honble Allahabad High Court in the case of Gularia Chini Mills vs. UOI reported in 2013-TIOL-568-HC-ALL-CX, and submits that for generation of electricity, bagasse is used in boiler as fuel and steam is generated by the pressure of steam, the turbine operates and generates electricity and no steam was used for generation of electricity. Therefore, the question of using dutiable input or input services for manufacture of electricity does not arise. In these circumstances, he prays that the impugned order is required to be upheld.
5. Heard both sides. Considered the submissions.
6. In this case the facts are not in dispute that only bagasse, a byproduct, on which no duty is payable, is used in generation of electricity as fuel. Bagasse is put into the boiler and steam generates and by the pressure of steam, turbine generates electricity but no steam is being used in manufacture of electricity. In these circumstances, the case laws relied upon by the learned AR have no relevance to the facts of this case. In the case of Sanghi Industries Ltd. (supra), the inputs were furnace oil/lubricants which were used in generation of electricity and in the case of MCC PTA India Corpn. Pvt. Ltd. (supra), fuel and other goods were used in general of electricity. Therefore, the facts of the case laws relied upon by the learned AR are not applicable to the facts of this case.
7. We further find that the facts of the case of Gularia Chini Mills (supra) are relevant to the facts of this case, wherein the Honble High Court has held that the electrical energy generated from bagasse is not covered under Chapter 27. Therefore, electrical energy is not an excisable goods nor is it exempted as defined in Section 2(d) of the Act. It was further held that the electricity is not an excisable goods under section 2(d) of the Act, hence Rule 6 of the Cenvat Credit Rules is not applicable as held by the Honble Supreme Court in the case of Solaris Chemtech Ltd. Therefore, relying on the decision of the Honble Allahabad High Court, we hold that the respondents are not required to reverse an amount of 10% of the value of electricity sold by the respondents to MSEDCL. Therefore, we do not find any infirmity in the impugned order and the same is upheld. The appeals filed by the Revenue are dismissed.
(Operative part pronounced in Court) (P.K. Jain) Member (Technical) (Ashok Jindal) Member (Judicial) tvu 1 5