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2015 (10) TMI 1207 - AT - Central ExciseReversal of CENVAT Credit - Credit on furnace oil used in generation of steam and in turn used in the manufacture of electricity - Held that - Commissioner (Appeals) has allowed the respondent s appeal and held that furnace oil used in the generation of steam which in turn used for manufacture of electricity following Tribunal s decision in the case of CCE Vs Sudarshanam Spinning Mills (2004 (1) TMI 162 - CESTAT, CHENNAI) which was challenged by Revenue before Hon ble High Court, Madras 2011 (8) TMI 1074 - MADRAS HIGH COURT . The Hon ble High Court by its order dt. 4.8.2011 dismissed the CMA filed by Revenue upholding Tribunal s decision on the issue. Therefore, the issue has attained finality in view of judgement of Hon ble High Court, Madras. Therefore, judgement of jurisdictional High Court, Madras is binding on this Tribunal. Accordingly, we hold that respondents are eligible for cenvat credit on furnace oil. By respectfully following the Hon ble High Court s order (supra), we find that there is no infirmity in the order of the L.A.A - Decided against Revenue.
Issues:
1. Reversal of cenvat credit on furnace oil used in the generation of steam and electricity manufacturing. Analysis: The appeal before the Appellate Tribunal CESTAT CHENNAI pertained to the reversal of cenvat credit on furnace oil utilized in the generation of steam and subsequently in the production of electricity. The Adjudicating authority had upheld a demand of Rs. 11,74,344/- along with a penalty of Rs. 10,000/- in their order dated 25.3.2004. However, the Commissioner (Appeals) reversed this decision and allowed the appeal, citing a previous Tribunal decision in the case of CCE Tirunelveli Vs Sudarshanam Spinning Mills reported in 2004 (166) ELT 461 (Tri.-Che). The appellant contended that the issue was pending before the Hon'ble Supreme Court in the matter of CCE Vadodara Vs Gujarat Narmada Valley Fertilizers Co.Ltd. - 2012 (286) ELT 481 (SC), where two judges had suggested referring it to a Larger Bench. On the other hand, the respondent highlighted that the Revenue had filed a C.M.A against the Tribunal's decision in the Sudarshanam Spinning Mills case before the Hon'ble High Court of Madras, which was dismissed on 4.8.2011, upholding the Tribunal's decision. Upon considering the arguments from both sides, the Tribunal observed that the Commissioner (Appeals) had correctly allowed the respondent's appeal based on the Tribunal's decision in the Sudarshanam Spinning Mills case. The Tribunal noted that the issue had attained finality as the Hon'ble High Court of Madras had dismissed the Revenue's C.M.A, affirming the Tribunal's decision. Consequently, the Tribunal held that the respondents were entitled to cenvat credit on furnace oil. By adhering to the High Court's order, the Tribunal found no fault in the Lower Appellate Authority's decision and rejected the Revenue's appeal, thereby upholding the impugned order. In conclusion, the Tribunal's judgment affirmed the eligibility of the respondents for cenvat credit on furnace oil based on the precedent set by the Hon'ble High Court of Madras, thereby bringing closure to the issue at hand.
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