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2012 (9) TMI 309 - AT - Central ExciseCenvat Credit on inputs used in manufacture of exempted final products - Low Sulphur Heavy Stock (LSHC) used as fuel in the generation of steam which was in turn used in the manufacture of exempted fertilizer - the assessee contested that exclusion of fuel-inputs from the purview of sub-rule (2) of Rule 6 would mean that such inputs are also automatically excluded from sub-rule (1) - Held that:- Sub-rule (1) is plenary and it restates a principle, namely, that CENVAT credit for duty paid on inputs used in the manufacture of exempted final products is not allowable, thus sub-rule (1) is plenary, hence, it cannot be said that because sub-rule (2) is inapplicable to fuel-input(s), CENVAT credit is automatically available to such inputs even if they are used in the manufacture of exempted goods. The cumulative reading of sub-rules (1) and (2) makes it abundantly clear that the circumstances specified in sub-rule (2), which inter alia requires separate accounting of inputs, are not applicable to the fuel-input(s). However, the said sub-rule (2) nowhere says that the legal effect of sub-rule (1) will stand terminated in respect of fuel-inputs which do not fall in sub-rule (2). Therefore, sub-rule (1) shall apply in respect of goods used as fuel and on such application, the credit will not be permissible on such quantity of fuel which is used in the manufacture of exempted goods. In view of the fact that fuel was used for generation of steam or electricity and these are not final products but intermediate products, the restrictions are not applicable and they are covered by the phrase for any other purpose. The Hon ble Supreme Court has taken the view that if the fuel is used for the manufacture of non dutiable final product, credit is not eligible. It may be seen that the Tribunal had not considered the provisions of Rule 6 and had also not considered the fact that Rule 6(1) is the plenary rule. The decision of the Apex Court in the GNFC [2009 (8) TMI 15 - SUPREME COURT] was rendered on 17.08.09 whereas the decision in the assessee's own case was rendered on 16.07.08. Not only the decision of the Apex Court in GNFC was subsequent to the decision in the assessee's own case but also in the case of GNFC, Apex Court had considered the relevant provisions of the law, applied them to the facts which are similar to the case of GSFC and came to the conclusion and therefore the ratio decidendi in that case would be definitely applicable to the present case.
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