TMI Blog2007 (6) TMI 451X X X X Extracts X X X X X X X X Extracts X X X X ..... surplus electricity generated was released out of the factory to TNEB grid - appeal allowed. - E/826 & 1150/2003 - 787 & 788/2007 - Dated:- 27-6-2007 - S/Shri P.G. Chacko, P. Karthikeyan, JJ. REPRESENTED BY : Shri P.C. Anand, Cons., for the Appellant. Smt. R. Bhagya Devi, SDR, for the Respondent. [Order per : P.G. Chacko, Member (J)]. The appellants are engaged in the manufacture of sugar. They have a co-generation plant which generates electricity, which is partly consumed captively for the manufacture of sugar and partly supplied to Tamil Nadu Electricity Board (TNEB). During the period May, 1996 to December, 1999, they had taken capital goods credit under Rule 51Q of the Central Excise Rules, 1944 on certain parts ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ute is well-founded. The Revenue has no case that any capital goods used in the manufacture of capital goods eligible for credit under Rule 57Q during the period of dispute were not so eligible. In other words, the denial of the subject credit to the appellants is not on the ground that the components and parts were used in the manufacture of ineligible capital goods. On the other hand, it is on the ground that a portion of the electricity generated by the co-generation plant was released out of the factory for supply to TNEB. The stand of the Revenue is that, in terms of Rule 57R(2), the entire quantity of electricity generated by the plant should have been captively consumed in the manufacture of sugar. The appellants are contesting this ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s mainly used within the factory of production of final product and partly sold to TNEB. In another case, a similar question arose with regard to components of high pressure boiler, which was used for generating steam, which in turn was used for the manufacture of sugar (final product) as well as electricity. In both the cases, following the decision of the Tribunal in the case of H.E.G. Ltd. (supra), the Bench held that capital goods credit was admissible to the party. The issue arising for consideration in the present case is identical. Learned SDR has not claimed that either Final Order No. 1494/05 or Final Order No. 75/2005 was appealed against. Apparently, the view taken by the appellants has virtually been accepted by the department. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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