TMI Blog2018 (4) TMI 466X X X X Extracts X X X X X X X X Extracts X X X X ..... way, in form and in costs, to the excisable product. In the absence of any allegation that research and development is not concerned with manufacture of the appellant, the disallowance of CENVAT credit does not find favor - appeal allowed - decided in favor of appellant. - E/85609/2017 - A/92264/2017 - Dated:- 17-11-2017 - SHRI C J MATHEW, MEMBER (TECHNICAL) Appearance: Shri SA Gundecha, Advocate for appellant Shri DS Chauhan, Superintendent (AR) for respondent M/s Force Motors Ltd is aggrieved by order-in-appeal no. PUN-EXCUS-001-APP-325-16-17 dated 9th January 2017 of Commissioner of Central Excise (Appeals), Pune which upheld the order of the lower authority confirming disallowance of inadmissible CENVAT credit o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... erson who engages in their production or manufacture on his own account; to suggest that the test of manufacture is not limited to the production of output. He also made submissions at length to justify the admissibility of the credit by placing reliance on various decisions. 3. Learned Authorized Representative explained the contours of the reasoning adopted by the lower authorities to highlight the correctness of the impugned order. 4. The issue in dispute is not the exigibility of output to duty that have not suffered the burden of duty. It is specifically on the issue of entitlement to CENVAT credit for which the definition of (k) input means - (i) all goods used in the factory by the manufacturer of the final p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ture of a final product. Explanation . - For the purpose of this clause, free warranty means a warranty provided by the manufacturer, the value of which is included in the price of the final product and is not charged separately from the customer; is crucial. 5. The inputs in dispute are not covered by the exclusion clause in the definition supra and, of the many elements that are specifically enumerated, it is only the first that is of relevance. A priori, it would appear that the goods used in the factory by the manufacturer of the final product would be eligible. It is important to note here that inputs are not restricted to such goods used in the factory by the manufacturer for the final product. It would, therefore, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... [2009 (240) ELT 641 (SC)] has held that 20. To sum up, we hold that the definition of input brings within its fold, inputs used for generation of electricity or steam, provided such electricity or steam is used within the factory of production for manufacture of final products or for any other purpose. The important point to be noted is that, in the present case, excess electricity has been cleared by the assessee 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, assessee was not entitled to CENVAT credit. In short, assessee is entitled to credit on the eligible inputs utilized in t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... llant is working under the system of self removal procedure. They cannot take the plea that the officers were visiting the unit and no irregularity was pointed out. Inasmuch as the Adjudicating Authority has given a finding that R D is not an integral part of the manufacture and in the absence of evidence that the R D activity resulted in the manufacture of final product, on which duty has been paid, the appellants are liable to pay the irregular Modvat credit availed. Hence, the confirmation of an amount of ₹ 38,91,220/- (Rupees Thirty Eight Lakhs Ninety One Thousand Two Hundred Twenty only) is upheld. However, the penalty under 57-I is limited to ₹ 4,00,000/- (Rupees Four Lakh Only). Interest under 57-I(5) is also confirme ..... X X X X Extracts X X X X X X X X Extracts X X X X
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