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2007 (11) TMI 522 - AT - Central ExciseCenvat/Modvat credit - Molasses - The appellant takes CENVAT credit on the Molasses used in the manufacture of Rectified Spirit/Denatured Spirit - contention of the Revenue that w.e.f. 1-3-2005, Rectified Spirit has become non-excisable and, therefore, no Cenvat Credit could have been availed by the appellant - Held that: - it cannot be said that Molasses is used only in the manufacture of Rectified Spirit. In other words, Molasses is used as a common input in the manufacture of exempted Rectified Spirit as well as dutiable Carbon Di-Oxide and Denatured Spirit. Hence, in terms of Rule 6 of CENVAT Credit Rules, if the credit on Molasses used in or in relation to the manufacture of the said Rectified Spirit is reversed, there is no violation of any provisions of law and the credit taken on Molasses cannot be denied. CENVAT credit - furnace oil used to generate steam - Held that: - The steam is partly used for generation of electricity and partly for processing the molasses in the distillery resulting in the production of Carbon Di-Oxide and Rectified Spirit/Denatured Spirit. Therefore, it cannot be said that the furnace oil is used only in the manufacture of Rectified Spirit. It is actually a common input used in the manufacture of exempted Rectified Spirit/dutiable Denatured Spirit and Carbon Di-Oxide - there is no need for reversal of credit on any portion of furnace oil attributable to Rectified Spirit. There is no justification for imposition of any penalty or demand of interest under Section 11AB. Appeal allowed - decided in favor of appellant.
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