2013 (7) TMI 159 - ALLAHABAD HIGH COURT

Cenvat Credit - Excisable goods vs. exempted goods - dutiability of electricity generated using bagasse as fuel - According to the petitioners, since electrical energy is not an excisable goods in view of definition of excisable goods in Section 2 (d) of Central Excise Act, 1944 read with Section 2 of the Central Excise Tariff Act, therefore, it is not exempted goods within the meaning of Rule 2 (d) of CENVAT Credit Rules, 2004 but even then, the Commissioner, Central Excise issued notices to the petitioners under Rule 6 (2) and Rule 6 (3) of the Central Excise Tariff Act, demanding the duty in respect of the electrical energy, sold outside the factory.

Held that:- Perusal of Section 2 (d) of Central Excise Act shows that the excisable goods are only those goods which are subjected to duty of excise as specified in the first Schedule or second schedule of the Central Excise Tariff Act. - Since Column of rate of duty is blank, therefore, in view of Section 2 of the Central Excise Tariff Act, 1985, electrical energy is not being subjected to excise duty for the purposes of being excisable goods under Section 2 (d) of the Central Excise Act.

The electrical energy generated from Naphtha, furnace oil, coal, etc., has been included under Chapter 27 as excisable goods on which the excise duty is being paid and the credit is taken respect of the excise duty paid on such inputs but in the instant case, no direct inputs are involved nor any input services have been availed/used and the Commissioner, Central Excise, without any basis observed that the petitioners have admitted that they have availed the CENVAT credit on inputs and input services used in relation to generation of electricity. The petitioner has only used bagasse as raw material which is a waste product, as already held by this Court in writ petition [2013 (1) TMI 525 - ALLAHABAD HIGH COURT] and no other inputs or input services has ever been used by the petitioner for generation of electricity which was only generated from bagasse. - electrical energy emerges from the bagasse and sold to U.P. Power Corporation Ltd. does not fall within the ambit of excisable goods.

Geetanjali Woolens Mill judgment [2007 (6) TMI 112 - CESTAT, AHMEDABAD] relied upon by the Commissioner in the impugned orders have no relevance as Geetanjali Woolens Mill's judgment [2007 (6) TMI 112 - CESTAT, AHMEDABAD] was in respect of custom duty and was only concerned with the 'tariff item and not with respect to the 'excisable goods' as defined under Section 2(d) of Central Excise Act, 1944.

Rule 6 of the 2004 Rules, which is applicable only to excisable goods, can alone be treated as exempted goods for the purposes of Rule 6 (3) of 2004 Rules, does not apply to electrical energy.

Jurisdiction of Court under Article 226 of the Constitution of India, if alternative remedy is available. - Held that:- Alternative remedy does not oust the jurisdiction of this Court under Article 226 of the Constitution of India, if it is found necessary for promotion of justice and prevention of injustice as decided in Collector of Customs vs. Ramchand Sobhraj Wadhwan[ 1955 (8) TMI 1 - HIGH COURT OF JUDICATURE AT BOMBAY] - all the writ petitions are liable to be allowed.