TMI Blog2009 (11) TMI 648X X X X Extracts X X X X X X X X Extracts X X X X ..... pted goods, Tribunal was justified to hold that respondent was entitled for modvat credit against the capital goods used in the captive power plant of the respondent and Rule 6(4) of the Rules was no bar for denying Cenvat Credit, appeal dismissed - 50 of 2008 - - - Dated:- 7-11-2009 - Dhirendra Mishra and R.N. Chandrakar, JJ. REPRESENTED BY : Shri Bhishma Kinger, Counsel, for the Appellant. S/Shri Virendra Sharma and S.K. Sharma, Counsels, for the Respondent. [Judgment per : Dhirendra Mishra, J.]. The appellant has preferred this appeal under Section 35G of the Central Excise Act, 1944 (for brevity the Act ) against the impugned order passed by the Customs, Excise Service Tax Appellate Tribunal, Principal Bench, Ne ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1,17,852/- on various parts used in the boilers and turbine of the aforesaid power plant. The lower authority disallowed the above Cenvat Credit of Rs. 1,17,852/- and imposed a penalty of Rs. 1,17,852/- under Section 11AC of the Act and Rs. 10,000/- under Rule 13 of the Cenvat Credit Rules, 2002 read with Rule 25 of the Central Excise Rules, 2002 for contravention of Rule 3 of the Cenvat Credit Rules, 2002 on the ground that the respondent had supplied a part of electricity to their sister concern located outside their factory premises through MPEB grid. They were only entitled to claim the credit on the inputs utilized in generation of the electricity used within their factory. Since the details of electricity wheeled out to their sister c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the factory premises through the grid of MPEB. Thus, capital goods against which Cenvat Credit is claimed is exclusively used for manufacture of exempted goods, as electricity is exempted from excise duty. In these circumstances, the respondent was not entitled for Cenvat Credit in proportion to the electricity generated from the captive power plant and exclusively used for sister concern through the grid of MPEB, as held by the Commissioner. Referring to Rule 2(b), 2(g) and 6(4) of the Rules, it was argued that the capital goods and inputs used exclusively in manufacture of exempted goods are not entitled for Cenvat Credit. 6. On the other hand, Shri Virendra Sharma, learned counsel appearing for the respondent submitted that from bare r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l equipment (iii) components, spares and accessories of the goods specified at (i) and (ii) above; (iv) moulds and dies; (v) refractories and refractory materials; (vi) tubes and pipes and fittings thereof; and (vii) storage tank used in the factory of the manufacturer of the final products, but does not include any equipment or appliance used in an office; 2(g) :- input means all goods, except [light diesel oil], high speed diesel oil and motor spirit, commonly known as petrol, used in or in relation to the manufacture of final products whether directly or indirectly and whether contained in the final product or not, and includes lubricating oils, greases, cutting oils, coolants, accessories of the final prod ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lant which generate electricity. 11. The only question to be decided in this appeal is whether the Tribunal was justified in allowing Cenvat Credit to the respondent for capital goods used in the power plant when major portion of the electricity generated was sold to the MPEB? 12. Plain reading of Rule 6(4) of the Rules makes it abundantly clear that Cenvat Credit in respect of capital goods shall not be allowed on capital goods which are used exclusively in manufacture of exempted goods. In the instant case, though major portion of the generated electricity from the power plant was sold to MPEB through its grid, however, it cannot be said that capital goods were exclusively used in manufacture of exempted goods (electricity) sold to ..... X X X X Extracts X X X X X X X X Extracts X X X X
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