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2018 (10) TMI 1195 - AT - Central ExciseCENVAT Credit - electricity being exempted from excise duty - whether the respondent is liable to reverse Cenvat credit on the electricity so wheeled out, under Rule 6 (3) of Cenvat Credit Rules, 2004, relating to the period from November, 2010 to October, 2011? Held that - The issue has been decided in the case of GULARIA CHINI MILLS AND OTHERS VERSUS UNION OF INDIA AND OTHERS 2013 (7) TMI 159 - ALLAHABAD HIGH COURT , where it was held that Electrical energy was neither excisable under Section 3 of CEA, 1944 nor exempted goods under Rule 2(d) of Cenvat Credit Rules, 2004. Thus, same was neither excisable nor exempted goods, hence Rule 6 of CCR was not applicable - appeal dismissed - decided against Revenue.
Issues:
1. Liability to reverse Cenvat credit on electricity wheeled out using bagasse for generation. Analysis: The appeal raised the issue of whether the respondent-assessee, a sugar and molasses manufacturer using bagasse for electricity generation, should reverse Cenvat credit on the electricity wheeled outside, considering the exemption of electricity from excise duty. A show cause notice was issued demanding duty on the electricity sold or wheeled out. The respondent filed a writ petition before the High Court challenging the notice, which directed a reply submission. The Commissioner confirmed a demand under Rule 6 (2) of the Cenvat Credit Rules, relating to goods and services attributable to electricity sold outside, imposing penalties. The respondent then challenged this in another writ petition, where the High Court held that bagasse used as fuel for electricity generation was waste and not a manufactured exempted product. The High Court concluded that electricity was neither excisable nor exempted goods, thus Rule 6 of the Cenvat Credit Rules was not applicable. The Tribunal, after hearing both parties, referred to a previous ruling by the High Court in M/s Gularia Chini Mills, which favored the appellant. Consequently, the appeal filed by the revenue was dismissed as infructuous.
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