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2017 (11) TMI 14 - AT - Central ExciseCENVAT credit - whether credit availed on capital goods used to set up captive power plant can be denied on the ground that the capacity to manufacture dutiable goods was not set up within a few years? - Held that: - Rule 6(1) and 6(4) of the Cenvat Credit Rules, 2004 lay down that no cenvat credit shall be allowed on inputs/ input services as well as capital goods which are used only in the manufacture of exempted goods or for provision of exempted services - In the present case, the capital goods on which cenvat credit has been availed, have been used only for the purpose of generation of electricity which stands wheeled out to the grid. It is on record that no part of the electricity has been used for manufacture of excisable goods since such plant was never set up. Electricity is not chargeable to any excise duty and falls within the definition of exempted goods in terms of Rule 2(d) of the Cenvat Credit Rules, 2004. Consequently, in terms of Rule 6(4), the cenvat credit availed is to be considered irregular and will be liable for recovery under Rule 14 of the Cenvat Credit Rules, 2004 read with Section 11A of the Central Excise Act, 1944 - appeal dismissed - decided against appellant.
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