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2018 (3) TMI 180 - AT - Central ExciseCENVAT credit - it appeared that the appellants have availed Cenvat credit on input and input services used for generation of electricity in their Captive Power Plant (CPP) without adhering to the provisions of Rule 6 of CCR, in respect of excess quantum of electricity wheeled out to TANGEDCO - Rule 6 (3) (i) of CCR - Held that: - on the eligibility of availment of Credit in respect of eligible inputs used for generating electricity, there cannot be any doubt. The important takeaway from the definition in Rule 2 (k) (iii) of CCR, however is that the eligibility of input credits will however be restricted to goods used for generation of electricity for captive use. No doubt, there is no definition of captive use in CCR. In such a situation, the meaning of the phrase captive use as understood when used in central excise law and notifications will prevail. The interpretation of the phrase captive use in respect of manufacture of excisable goods will only mean consumption of goods within the factory of manufacture and, more importantly, the fact that such goods are not sold of otherwise removed from the factory of manufacture. In Rule 2 k of CCR, in the Sub rule (I iv), apart from sub rule (iii), the only other provision related to manufacture of excisable goods is sub-rule (i) which concerns all goods used in the factory by the manufacturer of final products. On the same analogy, the goods used in the production of electricity for captive use will then mean the goods used for generation of electricity for consumption of manufacturer within his own factory of manufacture but definitely not electricity which is sold outside the factory. Penalty - Held that: - the ingredients attracting imposition of penalty equal to tax demanded under Rule 15 (1) of CCR are not attracted to the facts of the present case - the equal penalty imposed under Rule 15(1) is set aside. Appeal allowed in part.
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