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2019 (11) TMI 15 - HC - Central ExcisePermission for withdrawal of application - monetary amount involved in the appeal - denial of CENVAT credit - HELD THAT - It is averred in the application that Central Board of Indirect Taxes and Customs has issued instruction dated 22.8.2019 and revised the monetary limits for filing appeal before this Court to ₹ 1.00 Crore and the said instructions are applicable to pending appeal. It is further averred that office of Commissioner of Central Goods and Service Tax, Rohtak has sent instruction to the effect that personal penalty involved in the appeal being ₹ 5 lacs is below prescribed threshold limit and as such prayer for withdrawal of the appeal. Application dismissed as withdrawn.
Issues:
1. Admissibility of Cenvat Credit on inputs used in the generation of electricity cleared outside the factory. 2. Imposition of penalty on the General Manager for ommissions and commissions. Analysis: Issue 1: Admissibility of Cenvat Credit on inputs used in the generation of electricity cleared outside the factory. The appeal under Section 35(G) of the Central Excise Act, 1944 was filed by the Revenue against the order passed by CESTAT, New Delhi. The respondent-assessee's appeal was accepted by CESTAT, holding that the demand for payment of duty on inputs used in the generation of electricity cleared outside the factory was not sustainable. The key question raised was whether the electricity generated and sold outside the factory could be considered captively used for manufacturing final products, making the Cenvat Credit availed on inputs admissible under relevant provisions. The appellant argued that the Ld. CESTAT's decision on inadmissible Modvat/CENVAT Credit was incorrect. Issue 2: Imposition of penalty on the General Manager for ommissions and commissions. The respondent, who was the General Manager of the manufacturing company, was held responsible for the ommissions and commissions related to the clearance of electricity generated outside the factory without payment of duty. The Adjudicating Authority confirmed the demand and imposed a penalty of ?5 lakhs on the respondent. The question raised was whether the penalty was imposable under specific rules upon the General Manager for his role in the matter. The appeal before CESTAT was allowed, leading to the Revenue's appeal before the High Court. The respondent company, engaged in manufacturing various goods, had availed MODVAT/CENVAT credit on duty paid inputs and capital goods. A captive power plant was installed for electricity generation using specific fuels for which Modvat/Cenvat Credit was availed. Part of the electricity generated was cleared to the electricity board without duty payment, leading to the demand and subsequent legal proceedings. The appeal was filed against the order imposing penalty and confirming the demand. In a subsequent development, an application was filed seeking permission to withdraw the appeal based on revised monetary limits for filing appeals and the penalty amount falling below the threshold limit. The application was supported by an affidavit of the appellant's counsel, leading to the appeal being dismissed as withdrawn based on the revised instructions and the penalty amount being below the prescribed threshold. In conclusion, the judgment addressed the admissibility of Cenvat Credit on electricity generation inputs cleared outside the factory and the imposition of penalties on the General Manager for ommissions and commissions. The decision highlighted the interpretation of relevant excise rules, the company's utilization of credit facilities, and the subsequent legal proceedings leading to the appeal and its withdrawal based on revised monetary limits and penalty thresholds.
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