TMI Blog2014 (9) TMI 686X X X X Extracts X X X X X X X X Extracts X X X X ..... disputed that inputs on which credit is taken have been utilized for manufacture of final product on which Central Excise Duty has been paid/payable. In the case of sister concerns such captive consumption of materials become a case of revenue neutral exercise. Accordingly, cenvat credit with respect to inputs, sent to the power plant by the clinker unit for generation of electricity sent to grinding unit, cannot be denied to the appellant for not following the prescribed procedures of Rule 4(5)(a) and Rule 4(6) of the Cenvat Credit Rules 2004 which allowed the appellant to send the clinker to grinding unit under job work and then clear the finished goods from the job worker’s factory premises when diversion of inputs/electricity is not al ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... appellant argued that the issue has been decided by this Bench in the case of Sanghi Industries Ltd. Vs CCE Rajkot [2014 (302) ELT 564 (Tri-Ahmd)] and that it has been held that for not following proper procedure CENVAT Credit cannot be denied. It was his case that in the present proceedings also the steam generated is never sold to the sister concern. Ld. Advocate made the Bench go through Para 11 to 14 of the order passed by this Bench in the case of Sanghi Industries Ltd Vs CCE Rajkot (supra). It was his case that as per grounds G.1 of their appeal memoranda it has been always taken up that appellant would have been eligible for CENVAT Credit under Rule 4(5)(a) of CENVAT Credit Rules and that for procedural irregularities CENVAT Credit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... berated in these proceedings is whether appellant will be entitled to CENVAT Credit with respect to furnace oil used for generation of that part of the steam which is supplied to the sister concern of the appellant. Revenue has strongly relied upon the judgment of the Apex Court in the case of Maruti Suzuki Ltd Vs CCE Delhi-III (supra). In the case before the Hon ble Apex Court the excess electricity was diverted and sold to outside units for a consideration and such electricity was produced out of the inputs on which CENVAT Credit was taken. In the present proceedings there is no sale of steam to the sister concern. The facts of this case are similar to the facts of the case before us in Sanghi Industries Ltd Vs CCE Rajkot (supra) at macro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the contention now raised by the assessee or the distinguishing features. CESTAT by following the earlier decision of the Tribunal, held that the assessee is entitled to credit inspite of the fact that electricity so generated was used in the other units also. The CESTAT has not decided the question as to whether the electricity supplied to the other units of the assessee situated in different premises are also entitled to the credit. The sale made to the other concern was also not made referred to the order passed by the Tribunal. 12. Appellant has also agitated that procedural irregularities or non-compliance cannot be made the grounds for denying admissible cenvat credit when electrify supplied has been used for making goods on whic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ner of Central Excise or the Assistant Commissioner of Central Excise, as the case may be, having jurisdiction over the factory of the manufacturer of the final products who has sent the input or partially processed inputs outside his factory to a job-worker may, by an order, which shall be valid for a financial year, in respect of removal of such input or partially processed input, and subject to such conditions as he may impose in the interest of revenue including the manner in which duty, if leviable, is to be paid, allow final products to be cleared from the premises of the job-worker. 13. From the above provisions of Cenvat Credit Rue 2004 it is evident that Cenvat Credit of inputs will be admissible to an assessee when the inputs a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pellant. 14. From the above observations and the case laws relied upon by the appellant, it is inferred that procedures existed at the relevant time to avail cenvat credit on inputs sent to the power plant as job worker. The only irregularity committed by the appellant was that they did not follow the prescribed procedures. It has been a settled position of law now that a substantial benefit of cenvat credit cannot be denied for not following the prescribed procedures when it is not disputed that inputs on which credit is taken have been utilized for manufacture of final product on which Central Excise Duty has been paid/payable. In the case of sister concerns such captive consumption of materials become a case of revenue neutral exercis ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
