TMI Blog2012 (12) TMI 437X X X X Extracts X X X X X X X X Extracts X X X X ..... neral and not specific to the Central Excise Rules, 1944. The decision rendered in Commissioner of Central Excise v. Gujarat Narmada Fertilizers Company Limited [2009 (8) TMI 15 - SUPREME COURT ] has been rendered in the context of the Cenvat Credit Rules, 2002 and is, therefore, more apposite. There is an apparent conflict between GSFCL and Gujarat Narmada since GSFCL does lay down a general principle of law, no option but to refer the issue to a larger Bench to resolve the conflict between GSFCL and Gujarat Narmada. The conflict to be resolved is whether under the Cenvat Credit Rules, 2002 an assessee is entitled to claim cenvat credit on duty paid LSHS utilized as an input in the manufacture of fertilizer exempt from duty. - CIVIL AP ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g, the Commissioner adjudicated the first show cause notice by passing an order adverse to the assessee on 24th June 2004. The second show cause notice was similarly adjudicated and an adverse order passed on 30th August 2004. By these orders, the Commissioner confirmed the demand of cenvat credit wrongly claimed by the assessee. The Commissioner also directed the assessee to pay interest on the demanded amount and also imposed personal penalty under Rule 13 of the Rules. Proceedings before the Tribunal: 5. Feeling aggrieved, the assessee preferred two appeals before the Customs, Excise Service Tax Appellate Tribunal at Mumbai (hereinafter referred to as the Tribunal). The appeals were numbered as Appeal Nos.E/2517/2004 and E/3672/2004. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 8. Pursuant to the decision of the larger Bench, the substantive appeals were placed before a Division Bench of the Tribunal. By an order dated 10th April 2008 (impugned before us) the Division Bench of the Tribunal allowed the assessee s appeals relying on the decision of the larger Bench. Earlier proceedings in this Court: 9. In the meanwhile, the Revenue preferred an appeal to this Court against the decision of the larger Bench of the Tribunal. By a judgment and order dated 17th August 2009 (rendered after the impugned order passed by the Tribunal), this Court in Commissioner of Central Excise v. Gujarat Narmada Fertilizers Company Limited, (2009) 9 SCC 101 set aside the order of the larger Bench and decided the issue raised i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r than fuel) used in or in relation to the manufacture of the final product (dutiable and exempted). 12. This Court further held that on a cumulative reading of Rule 6(1) and Rule 6(2) of the Rules it is clear that the legal effect of Rule 6(1) of the Rules is applicable to all inputs, including fuel. Therefore, cenvat credit will not be permissible on the quantity of fuel used in the manufacture of exempted goods. As regards non-fuel inputs, an assessee would have to maintain separate accounts or be governed by Rule 6(3) of the Rules. 13. As mentioned above, when the substantive appeals were taken up for consideration by the Division Bench of the Tribunal, the decision of this Court in Gujarat Narmada was not available. Accordingly, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ted. It was, therefore, submitted that these appeals may also be referred to a larger Bench or we may await the decision of the larger Bench of this Court. 16. On merits, it was submitted that while deciding Gujarat Narmada this Court did not notice its earlier decision in Commissioner of Central Excise Vadodara v. Gujarat State Fertilizers Chemicals Ltd., (2008) 15 SCC 46. In GSFCL it was clearly held in favour of the assessee that a claim of modvat credit on LSHS is justified if it is used in the manufacture of steam, which in turn is used in the generation of electricity for the manufacture of fertilizer exempt from duty. Since that decision was overlooked, this Court fell into error while deciding Gujarat Narmada against the ass ..... X X X X Extracts X X X X X X X X Extracts X X X X
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