TMI Blog2005 (10) TMI 12X X X X Extracts X X X X X X X X Extracts X X X X ..... lso captively consuming electricity (exempted product), which is used in the manufacture of their final product and a part of the said electricity is supplied to the residential colonies. The appellants are also availing the facility of Cenvat Credit on the inputs, namely, Resin, Maxtreat, Hydrazine Hydrate, Morphile used for the demineralization of raw water. The treated water is used for generation of steam, which in turn is used for generation/manufacture of electricity. The appellants are reversing proportionate Cenvat Credit on the inputs contained in that part of the electricity, which is rolled out to the colonies. 4. The appellants are not maintaining separate inventory for the inputs used in the generation of the electricity use ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd U.P. State Sugar Corpn. Ltd. Vs. CCE, Meerut, 2000 (120) ELT 454 (Tri.) are well founded and followed. 10. The ld. Commissioner differentiated the case law, which was cited before him on the ground that it related to waste, etc. 11. The Collector's reliance on the Tribunal's decision in the case of M/s S.G.K. Industries Vs. CCE, Mangalore, 2002 (48) RLT 940 (CEGAT-Ban.)=2002 (147) ELT 345 is not correct since that decision was in respect of D.C. sets used as capital goods for generation of electricity and not for raw material inputs used for generation of electricity. In the case before us, the electricity gets generated by super hot steam and the steam thereafter used in the manufacture of paper. The inputs used in elect ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... out to the colony was required and usable in the factory, the same has to be considered as waste and input credit variations are not required. Similarly, 8% recovery under Rule 6 of Cenvat Credit Rules cannot be arrived at. 13. When the demands are not being upheld, the penalty under Section 11AC and interest under Section 11AB also cannot be upheld. Consequently the appeal is to be allowed after setting aside the impugned order; accordingly appeal is allowed. Per Chittaranjan Satapathy 14. I have carefully perused the order proposed by the Hon'ble Member (Judicial). The appellants have taken Cenvat credit on inputs such as Resin, Maxtreat, Hydrazine Hydrate and Morphile which they have used for demineralizing water which in tur ..... X X X X Extracts X X X X X X X X Extracts X X X X
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