TMI Blog2012 (12) TMI 854X X X X Extracts X X X X X X X X Extracts X X X X ..... ) On that much quantity of Naphtha, attributable to electricity generated in captive power plant/co-generation plant, used for manufacture of exempt goods viz. LPG (Domestic) and Superior Kerosene Oil (PDS) Benefit of exemption notification 67/95 denied in respect of On that much quantity of Naphtha, attributable to electricity generated in captive power plant/co-generation plant, used for allied activities like lighting in the artillery (sic) roads/yard, administrative building, canteen/cafeteria. - Appeal No.E/1346/07 and E/317/09-Mum - A/701-702/12/EB/C-II - Dated:- 6-6-2012 - S S Kang, J. Appellant Rep by: Mr M H Patil, Adv. Respondent Rep by: Mr Y K Agarwal, Additional Commissioner (AR.) Per: S S Kang: 1. Heard both sides. 2. In appeal Nos. E/1346/07 E/317/09, the following difference of opinion is referred to the third Member:- (a) Whether the exemption on the quantity of Naphtha attributable to electricity generated in captive power plant/co-generation plant, used for allied activities like lighting in the artillery (sic) roads/yard, administrative building, canteen/cafeteria is available to the appellant used in or in relation to the fin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and without such facility, refinery would not be legally permitted to function. Administrative building houses the functioning and that relates to the refinery activity and due to safety factors, the administrative offices are housed separately from the processing unit. As these are integral part of the refining process therefore the benefit of the Notification is available in respect of the Naphtha used in the generation of electricity which is used for above mentioned purposes. The appellant also relies on the definition of "input" as provided under Rule 2(k) of the Cenvat Credit Rules, 2004. The contention is that as per the provisions of the Cenvat Credit Rules, "input" means all goods, except light diesel oil, high speed diesel oil and motor spirit used in or in relation to the manufacture of final products whether directly or indirectly and whether contained in the final product or not used in or in relation to manufacture of final products or for any other purpose, within the factory of production. The contention is that as the electricity generated from the exempted Naphtha is used within the factory of production for lighting and administrative purposes, therefore it cons ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on of input as provided under the Cenvat Credit Rules, 2004 the credit is available to all inputs which are used in or in relation to the manufacture of final product or for any other purposes within the factory or production. I find that the Notification NO. 67/95-CE provides exemption only for inputs used in or in relation to the manufacture of final product, whereas the definition of input under the Cenvat Credit Rules is wide. 7. I find the Hon'ble Bombay High Court in the case of Indorama Synthetics (supra) interpreted the provisions of Rule 57B(iv) of the Central Excise Rules, 1944 which are similarly worded under the Cenvat Credit Rules, 2004 held that the words any other purposes within the factory of production is also to be connected with or relation to the production of the final products. The Hon'ble High Court held as under: 18. We have carefully considered the rival submissions. The basic dispute in the present case revolves on the meaning of the word any other purpose' contained in Rule 57B(iv) of the Central Excise Rules, 1944 as well as similar Rule contained in the Cenvat Credit Rules, 2001 and Cenvat Credit Rules, 2002. During the period from 1997 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the furnace oil used in the generation of electricity supplied to the residential complexes cannot be faulted. 22. The decision of the Apex Court in the case of Grauer and Weil (I) Ltd..v. CCE (supra) and the case of South Eastern Coalfields Limited.v. CCE (supra) relied upon by the assessee do not support their case. What is held in those cases is that the words any premises including the precincts thereof' in Section 2(m) of the Central Excise Act are wide enough to cover any activity carried on within the licensed premises. In both the above cases, the Apex Court was not called upon to consider the issue which is raised in this appeal. In any event, it is pertinent to note that in both the above cases, the activity in question related to the production of excisable goods or an activity connected with or related to the production of the final products. In the present case, supply of electricity to the residential complexes is wholly unconnected with or related to the final products produced in the factory of the assessee. 8. The appeal filed by M/s Indorama Synthetics(India) Ltd against the above decision of the Hon'ble Bombay High Court was dismissed by the Hon'ble Supr ..... X X X X Extracts X X X X X X X X Extracts X X X X
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