Union Of India vs M/S Heg Ltd (Sponge Iron Division) Borai ... on 7 November, 2009
8. I have also considered the various case laws relied upon by the
appellant. In all these cases, the dispute was that if the capital goods are
used both for manufacture of final products and for manufacture of
exempted products whether Cenvat credit on capital goods is admissible or
(7)
Appeal No: E/30064/2019
otherwise. For instance, in the case of HEG Ltd (supra), the appellant was
generating steam in boilers and using the steam so generated partly for
manufacture of their final product in the sponge iron and partly for
generation of electricity through distribution lines. In the present case, the
PPA shows that TG-2 has to operate in an island mode. It is not meant to be
used for both manufacture of sugar and for sale of electricity to the grid. In
view of the above, I find that the present case is distinguishable on the facts
of the case and this factual matrix, the appellant is not entitled to Cenvat
credit on capital goods on TG-2 meant exclusively for supply of power to
grid.