2010 (12) TMI 31 - SC - Central Excise

Modvat / Cenvat credit - credit on petroleum products - Rule 57B - Held that - the appellant-assessee is entitled to take credit in respect of the petroleum products used by them in the generation of electricity as inputs for the amount actually paid on account of specified duty upto 2nd June 1998 and thereafter @ 95% of the duty paid - Jindal Poly Films Ltd. vs. CCE (2006 -TMI - 47612 - SUPREME COURT OF INDIA)

Summary

Issues involved:
Appeal against Tribunal's judgment on Central Excise Act, 1944; Entitlement to benefit of Rule 57 B of Central Excise Rules for petroleum products used in electricity generation.

Analysis:

1. Issue: Appeal against Tribunal's judgment
The Supreme Court heard two appeals under Section 35-L (b) of the Central Excise Act, 1944, directed against the judgment of the Customs Excise and Service Tax Tribunal. The Tribunal had concluded that the appellant was not entitled to the benefit of Rule 57 B of the Central Excise Rules for petroleum products used in electricity generation.

2. Issue: Entitlement to benefit of Rule 57 B of Central Excise Rules
The Tribunal's decision was based on a previous case, Jindal Polymers Vs. Commissioner of Central Excise, Meerut. However, the Supreme Court noted that the decision in the Jindal Polymers case had been reversed by the Supreme Court in the case of Jindal Poly Films Ltd. vs. Commissioner of Central Excise, Meerut-II. Following this reversal, the Supreme Court allowed the appeals, setting aside the Tribunal's judgment. The appellant was held entitled to take credit for the petroleum products used in electricity generation as inputs, in accordance with Rule 57 B of the Central Excise Rules. The appellant could claim credit for the amount actually paid on account of specified duty up to a certain date, and thereafter at a specified rate.

This detailed analysis outlines the legal issues involved in the judgment, the basis of the Tribunal's decision, and the Supreme Court's ruling on the entitlement to the benefit of Rule 57 B of the Central Excise Rules for petroleum products used in electricity generation.