TMI Blog2011 (3) TMI 1596X X X X Extracts X X X X X X X X Extracts X X X X ..... -rule. However, exclusion of fuel-input vis-a-vis non-fuel-input would still fall in sub-rule (1) - appeal dismissed - decided against Revenue. - TAX APPEAL No. 1132 of 2009 - - - Dated:- 24-3-2011 - MR. AKIL KURESHI AND MS SONIA GOKANI JJ. MR RJ OZA for Appellant(s) : 1, RULE SERVED BY DS for Opponent(s) : 1, ORAL ORDER (Per : HONOURABLE MR.JUSTICE AKIL KURESHI) 1. Revenue is in appeal against the judgment of the Tribunal dated 18.2.2008 raising following questions for our consideration:- (i) Whether the Cenvat Credit is available on inputs used in manufacture of exempted goods in contravention of provisions of Rules 57AD of the Central Excise Rules, 1944? (ii) Whether the CESTAT has committed an error in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... payment of duty on the final product, as held by the Tribunal in the case of Kirloaskar Oil Engines, cited by the department. In this regard I also rely on a recent decision of the Tribunal in the case of CCE vs. Nestle India reported in 2005(184) ELT.152 (tri. Del) in which it has been held as follows: Cenvat/ Modvat - Input Residual furnace oil used to generate steam which is further used in the manufacture of dutiable as well as exempted products- Input being used as fuel, cenvat credit only disallowed on such quantity of inputs as used in the manufacture of exempted goods and assessee not required to pay 8% ofthe value of exempted goods. Rule 57AD(2) of erstwhile Central Excise Rules, 1944- Rule 6 of Cenvat Credit Rules, 2002. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed, revenue's appeal becomes infructuous. The same is accordingly rejected. 4. Counsel for the appellant submitted that the decision of the larger Bench of the Tribunal in the case of Gujarat Narmada Valley Fertilizers Co.Ltd. (supra) was carried in appeal. Gujarat High Court, by its impugned judgment dated 14.7.2008, dismissed the Tax Appeal of the Revenue. The issue was carried in further appeal before the Apex Court. The Apex Court, by the reported judgment in the case of Commissioner of C.Ex. vs. Gujarat Narmada Fertilizers Co.Ltd. reported in 2009(240) E.L.T. 661(S.C.), had reversed the judgment of the Gujarat High Court and allowed the Revenue's appeal. 5. Upon perusal of the orders on record, as we well as the judgme ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... al effect of sub-rule(1) has to be applied to all inputs including fuelinputs, only exception being non-fuel-inputs, for which one has to maintain separate accounts or in its absence pay 8%/10% of the total price of the exempted final products. Therefore, sub-rule(1) shall apply in respect of goods used as fuel and on such application, the credit will not be permissible on such quantity of fuel which is used in the manufacture of exempted goods. In our view, the above aspect has not been properly appreciated by the Gujarat High Court in the above case of M/s. Gujarat Narmada Valleyreported in 2006(193) E.L.T 136 (supra). 11. For the above reasons, we find merits in the Department's civil appeals. 6. Issues being common and the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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