TMI Blog2009 (2) TMI 844X X X X Extracts X X X X X X X X Extracts X X X X ..... dutiable as well as exempted goods and party was not maintaining any separate accounts of the said inputs being used in manufacture of exempted goods as per provisions of Rules 57CC(9)? 2. Whether party is liable to pay an amount of ₹ 1,79,52,77,469/- (Rupees one crore seventy nine lakh (sic) only) which is equivalent to 8% of the price of said exempted goods in terms of rule 57CC(9) of the rules, which include the credit of ₹ 1,80,49,568/- (Rupees one crore eighty lakh forty nine thousand five hundred sixty eight only)? On 10.8.2006 itself, CEA No. 62 of 2004 was also admitted by the Division Bench and the same was ordered to be heard alongwith CEA No. 1 of 2006. Subsequently on 21.9.2006 and 28.9.2006, CEA Nos. 48 and 42 of 2006 respectively were admitted by the Division Bench and the same were ordered to be heard alongwith CEA No. 62 of 2004. In this manner, all these appeals were clubbed together. Moreover, similar facts and common questions of law are involved in these appeals. However, the facts are being referred from CEA No. 1 of 2006. M/s Nestle India Ltd., Moga-respondent No. 1 is engaged in the manufacture of excisable goods. The dutiable produ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... spondent No. 1 demanding 8% of the price of exempted goods manufactured by it by invoking Rule 57CC of the Excise Rules. The following seven show cause notices were issued:- Sr. No. Show Cause Notice No. Period Amount (in Rs.) 1. V(27) 15/CE/01/ADJ/CHDII/ 2000/ 960-64, dated 21.3.2001 1.9.96 - 31.7.98 104,39,18,081/- 2. V 30(27)D/30/47/99/1097-99 dated 3.3.1999 1.8.98 31.12.98 25,38,40,015/- 3. V (4)D/27/Nestle/ 99/3921-23 dated 31.7.1999 1.1.99 30.6.99 26,68,00,998/- 4. V(4)D/ 18/Nestle/2000/777-78dated 1.2.2000 1.9.99 31.2.99 10,37,06,426/- 5. V(21)15/ Central Excise/11/Adj/CHD-II/2001/1008-11,dated 25.1.01 1.1.2000 31.3.2000 12,70,11,949/- 6. V(27)15/CE/25/ CHD-II/2001/ 1406-1410 dated 25.4.01 1.4.00 31.12.00 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... le goods whereas in the present case steam produced out of RFO is used in the manufacture of both dutiable and exempted goods. The appellants are fully justified in contending that the credit cannot be denied even if the steam is utilised for manufacture of exempted final products also in the light of the proviso inserted to Rule 57A w.e.f. 18.5.95. The above proviso reads as follows:- Provided also that the credit specified duty shall be allowed in respect of inputs which are used for generation of electricity or steam, used for manufacture of final products or for any other purpose within the factory of production. In Navsari Oil Products Ltd. Vs. CCE Surat 2993(53) RLT 96 we have taken the view that words for any other purpose within the factory of production would take in manufacturing non-dutiable items also. The ratio of the above decision is directly applicable to the facts of the present case. 4. In the light of the above, we set aside the order impugned and allow the appeal. Mr. Kamal Sehgal, learned counsel for the Revenue-appellant has argued that under Rule 57AD(2) of the Excise Rules which was applicable from 01.04.2000 to 31.12.2000, the as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he provisions of Rule 57CC would not apply. He has drawn our attention to the show cause notice where the aforesaid factual position has not been disputed. This position has also remained undisputed in the Order-in- Original and the impugned order passed by the Tribunal. He has stressed that those inputs which are used as fuel have been specifically excluded by Rule 57CC of the Excise Rules and accordingly, so long as the input can be established to be used as a fuel, the exclusion under Rule 57CC of the Excise Rules would operate irrespective of the outcome of such a use as a fuel. In order to support his submission, learned counsel has placed reliance on a judgment of this Court rendered in case of CCE v. Super Auto (I) Ltd., 2008 (221)ELT 41 (P H). Another submission made by the learned counsel is that RFO has been used inside the factory of respondent No. 1 in their boilers to generate steam for manufacturing of both dutiable and exempted final products. They have been receiving duty paid RFO and were availing Modvat credit thereon under the provisions of Rule 57B of the Excise Rules. The RFO was used for generation of steam which in turn was further used for manufacture of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... avour of the assessee-respondent No. 1 by the Division Bench judgment of this Court rendered in the case of Super Auto (Supra). It would be necessary first to read Rule 57CC (1) and (9) of the Excise Rules: - 57CC. Adjustment of credit on inputs used in exempted final products or maintenance of separate inventory and accounts of inputs by the manufacturers: (1) Where a manufacturer is engaged in the manufacture of any final product which is chargeable to duty as well as in any other final product which is not chargeable to duty and the manufacturer takes credit of the specified duty on any inputs (other than inputs used as fuel) which is used or ordinarily used in or in relation to the manufacture of both the aforesaid categories of final products, whether directly or indirectly and whether contained in the said final products or not, the manufacturer shall, unless the provisions of sub-rule (9) are complied with, pay an amount equal to eight per cent of the price (excluding sales tax and other taxes, if any, payable on such goods) of the second category of final products charges by the manufacturer for the sale of such goods at the time of their clearance from the factory. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a member) in the case of Super Auto (supra) has held as under:- 8. A conjoint reading of rub-rule (2) and (3) of Rule 57C of the Rules shows that in cases where inputs are intended to be used as fuel, the provision of sub-Rule (1) of Rule 57CC of the Rules are not to apply. However, in other cases where a manufacturer of any final product which is chargeable to duty as well as in any other product that is not chargeable to duty the manufacturer in order to take credit has to comply with sub-rule (9) of Rule 57CC of the Rules. It envisages that separate inventory/accounts are required to be maintained in respect of the receipt and use of inputs for the aforesaid purpose. Such a manufacturer is restrained from taking credit of the specified duty paid on such items. 9. It is, thus, clear that the provisions of sub-rule (2) of Rule 57C and sub-rule (1) and (9) of Rule 57CC of the Rules do not apply to inputs intended to be used as fuel. In the instant case, there is categorical finding that furnace oil is used as fuel only. Therefore, the view taken by the Tribunal is unassailable and the respondent-assessee has been rightly held to be entitled to Modvat credit . Theref ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Supreme has held the manufacturer-assessee to be entitled to Modvat credit for the use of low-sulphur heavy stock and also placed reliance on the view taken by the Tribunal in other cases, their Lordships have observed as under:- 8. The Tribunal by the impugned order has set aside the order passed by the Commissioner (Appeals) as well as that of the Authority-in-Original and allowed the appeal filed by the Respondent. Insofar as the contention raised by the respondent that LSHS was being used for generation of steam which in turn was being used for manufacture of final products, namely, fertilizers was concerned, the Tribunal relying upon an earlier decision of a larger Bench of the Tribunal in the case of Ballarpur Industries Limited v. Collector of Central Excise, Belgaum, 2000 (116) ELT 312 held that Assessee was entitled to modvat credit for LSHS. It was held by the Tribunal that the issue involved in the present case having already been concluded by a larger Bench of the Tribunal, the same was no longer res integra. It is pertinent to mention here that a batch of appeals filed against, amongst other cases, the decision in the case of Ballarpur Industries Limited (supra) ..... X X X X Extracts X X X X X X X X Extracts X X X X
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