TMI Blog2017 (3) TMI 652X X X X Extracts X X X X X X X X Extracts X X X X ..... r appellant is using the entire electricity captively - for the limited purpose of verifying whether appellant is selling electricity outside and therefore requires to reverse the proportionate credit, the matter requires to be remanded. Extended period of limitation - Held that: - the appellant has filed regular ER-1 returns and have disclosed the credit availed by them. In such back ground, it cannot be alleged that the appellant is guilty of willful suppression of facts. Apart from the vague allegation there is no evidence to establish that appellants have willfully suppressed facts - extended period not invokable - However the demand raised for the normal period in respect of rectified spirit as well as electricity sold outside will ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s on limitation. On merits it was submitted that the department has issued Show Cause Notice treating electricity as an exempted good. That the appellant has installed a captive power plant for generating electricity. The inputs used for generation of electricity are molasses and coal. The molasses is produced in their sugar unit. The appellants have received services for transportation of coal and paid service tax on such services. Similarly telephone service, certification, service charges, legal service, audit service, cost auditing and courier service are considered by the department to be common input services used by the appellant for manufacture of both dutiable and exempted goods. That it is fundamentally wrong on the part of the de ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... -2008 and 2009-2010 and 2011. In such audit, the appellant had furnished all documents / records to the audit officers. These included the returns filed by the appellant as well as the statements of credit availed by them. Even in such audit, the department did not raise any objection in regard to the credit availed by the appellant. Therefore the allegation that the appellant has suppressed facts is totally wrong. The Learned Counsel submitted that major part of the Show Cause Notice would come within the extended period of limitation. For the demand in respect of credit for normal period} the demand in respect of electricity used captively for manufacture of goods is not sustainable. 5. Against this, the Learned AR, Shri. Arun Kumar re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... guilty of suppression of facts and the Show Cause Notice issued invoking extended period of limitation is legal and proper. 7. I have heard the submissions made before me. Admittedly the appellants have not maintained separate accounts for the input services used in manufacture of dutiable and exempted products. In the Annexure to the Show Cause Notice, the department has considered sugar, de-natured spirit, Ethanol and Co2 as dutiable products manufactured by appellant. Rectified spirit and electricity is treated as exempted products manufactured by them. The department has thus proceeded to quantify the credit availed on common input services used for rectified spirit and electricity for the period 2007-2008 to 2011-2012 and arrived a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... regard to whether appellant is using the entire electricity captively. The Counsel for appellant submitted that he is not aware whether electricity is sold by appellant. Therefore am of the view that for the limited purpose of verifying whether appellant is selling electricity outside and therefore requires to reverse the proportionate credit, the matter requires to be remanded. 9. The next issue is with regard to the limitation. As pointed out by the Ld. Counsel for appellant, periodical Show Cause Notices have been issued to the appellant alleging irregular availment of credit on capita! goods installed in thee captive power plant. Interestingly, these notices also covers almost very same period. Further, audits have been conducted fo ..... X X X X Extracts X X X X X X X X Extracts X X X X
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