TMI Blog2014 (1) TMI 1570X X X X Extracts X X X X X X X X Extracts X X X X ..... a specific entry in a rule and the said entry pre-supposes that for the purpose of eligibility of credit of duty of inputs, those inputs must be used for manufacture of final products or for any other purpose within the factor of production, the assessee cannot take shelter under a different entry. Admittedly, the assessee has used furnace oil in the generation of steam and the said steam was transferred altogether to a different unit situated outside the factory premises. Therefore, the case of the assessee would come under Rule 57B(1)(iv) - Rule 57C(1)(ii) has to be decided by the CESTAT on merits - The matter is remanded to the CESTAT for consideration regarding the eligibility to claim credit on the basis of Rule 57C(1)(ii) - Decided i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... naphtha was used as fuel and in turn, it was used for generation of electricity. According to CESTAT, the word fuel was not employed in clause (iv) of Rule 57B(1) or the corresponding part of Rule 57AA(d). Therefore, it is obvious that the word goods used in clause (iv) of Rule 57B(1) and in the corresponding part of Rule 57AA(d) excludes fuel, and therefore, it should be considered as goods other than fuel , used for generation of electricity in the factory of production. In short, CESTAT arrived at a finding that naphtha is covered by the expression goods used as fuel and it is eligible for Modvat credit irrespective of the nature of its use in the factory and accordingly, the appeal was allowed. Feeling aggrieved by the said orde ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and that too within the factory of the assessee and as such, they are entitled to Cenvat credit. 5. The learned counsel for the assessee supported the order passed by CESTAT. According to the learned counsel, electricity was supplied to M/s. Future Polymers Ltd., which is a 100% export oriented unit and as such, CESTAT was correct in their finding regarding the eligibility of the assessee to claim the Modvat credit. The learned counsel contended that the assessee is eligible under Rule 57A of the Customs Tariff Rules to take credit of the duty paid on naphtha oil used in the manufacture of steam used for generation of electricity inasmuch as naphtha was used in or in relation to the manufacture of final product viz., steam. According to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... within the factory of production, they can avail Modvat credit. 8. The factual matrix indicates that the assessee used furnace oil in the generation of steam. A part of the steam was transferred to a unit situated outside their factory. Though there is no dispute about the inputs, the fact remains that the steam generated was not used within the factory of production. It is not the case of the assessee that M/s. Futura Industries Limited is a 100% export oriented unit. Rule 57C allows credit of duty in respect of export oriented undertakings. When there is a specific entry in a rule and the said entry pre-supposes that for the purpose of eligibility of credit of duty of inputs, those inputs must be used for manufacture of final products ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ity has been cleared by the asses-see at the agreed rate from time to time in favour of its joint ventures, vendors, etc. for a price and has also cleared such electricity in favour of the grid for distribution. To that extent, in our view, the assessee was not entitled to Cenvat credit. 46. In short, the assessee is entitled to credit on the eligible inputs utilised in the generation of electricity to the extent to which they are using the produced electricity within their factory (for captive consumption). They are not entitled to Cenvat credit to the extent of the excess electricity cleared at the contractual rates in favour of joint ventures, vendors, etc., which is sold at a price. 11. The learned counsel for the assessee attempte ..... X X X X Extracts X X X X X X X X Extracts X X X X
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