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TMI Blog2014 (2) TMI 395X X X X Extracts X X X X X X X X Extracts X X X X ..... n, they are taken up together for consideration and disposal. 2. The appellant M/s Jawahar S.S.K. Ltd., Kolhapur is a manufacturer of sugar / molasses. They generate electricity in the factory for further use from bagasse. Since there is no liability of excise duty on electricity generated, the appellant did not discharge any excise duty liability. Part of the electricity so generated was sold by the appellant to Maharashtra State Electricity Board (MSEB in short). The appellant did not keep any separate records on the inputs/input services used in the manufacture of electricity which was captively consumed and which was sold to MSEB. The department was of the view that since the appellant did not maintain any separate records in respect o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 5, as being subject to a duty of excise and includes salt. Since no rate of duty is mentioned against the said sub-heading No., electricity is not subject to a duty to excise. Hence they are not excisable goods. The appellant relies on the decision of the Hon'ble High Court of Allahabad in the case of Gularia Chini Mills Vs. Union of India wherein an identical issue was considered and it was held by the Hon'ble High Court that electricity cannot be treated as exempted goods under Rule 6 of CCR and, therefore, the impugned demands are not sustainable in law. As regards the CENVAT credit demand on inputs, it is contended that these are used for water treatment to avoid damage to the boiler tubes and further lubricants/greases are used for lub ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bad High Court held that electrical energy which is mentioned in Chapter 27 of the Central Excise Tariff Act covers only those electrical energy which is generated from mineral fuels, mineral oil and products obtained therefrom and electrical energy produced from Baggase is not covered under Chapter 27 and hence such electrical energy is not excisable goods nor is it exempted goods as defined in Section 2(d) of the Act. It was further held that Rule 6 of the CENVAT Credit Rules, 2004 refers to both dutiable / excisable goods and exempted goods. Only then, it is necessary for the manufacturer to maintain separate accounts. Rule 6 of the said Rules provides that when CENVAT credit is taken on the inputs/input service which are used for manufa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t services which have been used in the generation of electricity which have been sold to MSEB. 6.3 From the records it is seen that the common inputs on which credit has been availed are (1) Sulphur, (2) HCL. (3) Caustic soda, (4) Lubricant Oil, (5) T-46 (6) Turbo Oil, (7) Boiler Chemicals, (8) Flocculants, (9) Colour Precipitate, (10) Grease and (11) Phosphoric acid. Of these inputs Sulphur, HCI, Caustic Soda, Boiler chemicals, Flocculants, Colour precipitate and Phosphoric acid has nothing to do with the generation of electricity and therefore, there is no need to reverse any credit taken in respect of these inputs. Similarly in the case of input services, Common input services are 91) i9nward cane Transportation (2) Technical Inspection ..... X X X X Extracts X X X X X X X X Extracts X X X X
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