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2022 (6) TMI 536 - CESTAT NEW DELHIReversal of CENVAT Credit - input services - generation of electricity which was captively used but some part thereof was also sold by them/exempt goods - common input - Coal - Rule 6(1), 6(2), 6(3A), 6(3D) of CCR, 2004 - Whether for the electricity generated by the appellants for captive consumption, some part whereof has been sold to state electricity body, the appellants are not liable to take the credit on such amount of electricity as has been sold out? HELD THAT:- In light of these admitted facts foremost it is required to adjudicate as to whether the electricity is an exempted good to cover the case of the appellants within the scope of Rule 6 of CCR, 2004. The law in this case has been settled - Hon’ble High Court, Allahabad in the case of GULARIA CHINI MILLS AND OTHERS VERSUS UNION OF INDIA AND OTHERS [2013 (7) TMI 159 - ALLAHABAD HIGH COURT] has held that The electrical energy generated from Bagasse is not covered under Chapter 27. Similarly, Chapter 27 does not cover electrical energy produced by solar power, hydro power, wind power or from bagasse. Therefore, we are of the view that electrical energy is not an excisable goods nor it is exempted goods as defined in Rule 2 (d) of the 2004 Rules. In the present case, Cenvat credit has been taken on the inputs used, however, suo moto proportionately reversed for the electricity which has been sold out. Further, it is observed that the Rule 6 of CCR, 2004 gives three separate options to the assessee as mentioned under sub rule (1), (2) and (3) thereof and to exercise any one of these options is the prerogative of assessee. The department cannot compel the assessee to opt for a particular option. Further, w.e.f. 01.04.2008 Rule 6 (3A) has been introduced, according to which the assessee is eligible to reverse proportionate credit on inputs and input services used in manufacture of exempted goods. Invocation of Extended period of Limitation - HELD THAT:- There is no denial for the fact that similar show cause notices have already been served upon the appellants for the previous years. Suppression of facts in those circumstances cannot be alleged - it is held that invocation of extended period of limitation has also been wrongly confirmed. Once there was no suppression question of imposition of penalty does not at all arise. Appeal allowed - decided in favor of appellant.
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