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TMI Blog2025 (4) TMI 953X X X X Extracts X X X X X X X X Extracts X X X X ..... in the manufacture of sponge iron, pig iron and billets and the raw material used for manufacturing of the said items are iron ore and coal/coke. The assessee is availing Cenvat credit on inputs such as iron ore and coal/coke and input services such as goods transport agency for coal, cargo handling service for coal, security services, repair and maintenance service and manpower recruitment services used in manufacture of their final product. The assessee is also having five captive power plants in their factory premises which were utilized for the generation of electricity, for use of manufacturing of dutiable finished goods. Some portion of the above duty paid coal, along with coal fines and coal rejects were used in Plant 1 and 2 for ge ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sed the Cenvat credit to the extent of quantum of electricity sold outside the factory, which suffice the obligation of manufacturer in the instant matter. But, the adjudicating authority held that the coal rejects and coal fines which has been used by the assessee for manufacture for generation electricity, the assessee is not reversed proportionate Cenvat credit. In that circumstance, a demand of Rs.2,65,35,674/- was confirmed and equivalent amount of penalty was also imposed. The adjudicating authority also dropped the demand of Rs.11,52,15,799/- on the ground that as the assessee has reversed proportionate Cenvat credit of input and input services used in manufacture of their final exempted final products. Against the said order, both s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uthorized Representatives appearing on behalf of the Revenue submitted that as coal rejects and coal fines which has been used for generation of electricity and drew our attention to the show cause notice. Paragraph 3.2 thereof to say that the proportionate reversal was not done by the assessee in terms of Rule 6(3)(i) of Cenvat Credit Rules, 2004 as they have not reversed the Cenvat credit on coal rejects and coal fines. He also relied on the decision of Hon'ble High Court of Bombay in the case of Commissioner of Central Excise Vs. Nicholas Piramal (India) Ltd. - 2009 (244) ELT 321 (Bom.). 5. Heard the parties. Considered the submissions. 6. We find that in this case primary issue is that: ISSUE NO. A Whether the proportionate reversal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd in that case the assessee is not required to pay an amount equal to 8/10% of the value of electricity. In this case, admittedly, the appellant has already reversed the entire amount of input/input services used in generation of electricity, therefore, same is sufficient. Therefore, appellant is not required to pay any amount of the value of 8/10% of electricity." The said order has been affirmed by the Hon'ble Chhattisgarh High Court reported (supra). In that circumstances, we hold that the proportionate reversal of Cenvat credit availed on input and input services which has been used for generation of electricity is sufficient to meet out the provision of Rule 6(3)(i) of Cenvat Credit Rules. Therefore, on that count no demand is sustai ..... X X X X Extracts X X X X X X X X Extracts X X X X
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