2018 (5) TMI 1890 - HC - Central Excise

Sale or not - electricity so generated and cleared to the grid outside the factory - captive consumption or not - CENVAT credit - HELD THAT - Once earlier view expressed by the Tribunal has been accepted by the department, we do not find that any substantial question of law to arise in the present appeal. Appeal dismissed.

Summary

Issues:
1. Interpretation of whether electricity generated and cleared to the grid outside the factory constitutes a sale under the Central Excise Act, 1944.
2. Determination of whether electricity generated and sold outside the factory premises can be considered captively used for manufacturing final products and whether Cenvat Credit availed on inputs used in power generation is admissible.
3. Review of whether the CESTAT's final order dismissing the department's appeal and upholding the Commissioner's order considered all relevant provisions.
4. Assessment of the sustainability of the CESTAT judgment in law.

Issue 1:
The primary issue in this case pertains to the interpretation of whether electricity generated and cleared to the grid outside the factory should be considered a transaction of 'sale' under the Central Excise Act, 1944. The Tribunal relied on a previous order in Jindal Stainless Ltd. to support its decision. The Court noted that since the department had accepted the Tribunal's earlier view, there was no substantial question of law to be addressed in the present appeal. Consequently, the Court dismissed the appeal.

Issue 2:
The second issue involves determining whether electricity generated and sold outside the factory premises can be deemed captively used for manufacturing final products and whether Cenvat Credit availed on inputs used in power generation is admissible. The CESTAT's final order was questioned regarding the application of Rule 57A, 57B of Central Excise Rules, 1944, 57AB, 57AA of Central Excise (2nd Amendment) Rules, 2000, and Rule 2 and 3 of the Cenvat Credit Rules, 2001 and 2002. However, the Court did not find any merit in the appeal and dismissed it.

Issue 3:
The third issue revolves around reviewing whether the CESTAT's final order properly considered all relevant provisions when dismissing the department's appeal and upholding the Commissioner's order. The Court observed that the CESTAT's decision was based on the acceptance of the Tribunal's earlier view, leading to the dismissal of the appeal. The Court found no substantial question of law to warrant further consideration.

Issue 4:
The final issue concerns the sustainability of the CESTAT judgment in law. The Court, after analyzing the arguments presented and the previous orders relied upon, concluded that the CESTAT's decision was legally sustainable. As a result, the Court dismissed the appeal and also rejected the application for condonation of delay in filing the appeal.

In conclusion, the High Court of Punjab and Haryana dismissed the appeal after finding no substantial question of law arising from the issues raised regarding the treatment of electricity generated and sold outside the factory premises, the admissibility of Cenvat Credit, and the sustainability of the CESTAT judgment.