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TMI Blog2009 (8) TMI 464X X X X Extracts X X X X X X X X Extracts X X X X ..... er used in canteen or office building is not available to the respondent. The impugned order in this regard is set aside. But there is no malafide intention of the respondent thus no penalty can be imposed. - . E/295/2009 - A-462/KOL/2009, - Dated:- 10-8-2009 - Shri S.S. Kang, Vice-President Shri J.A. Khan, SDR, for the Appellant. Shri S.N. Sinha Mahapatra, Advocate, for the Respondent. [Order]. - Heard both sides. The Revenue filed this appeal against the Order-in-Appeal passed by the Commissioner of Central Excise (Appeals) whereby the credit in respect of inputs used as fuel for generation of electricity which is further used in the canteen and office building is allowed. 2. The contention of the Revenue is that as pe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of electricity provided, the electricity is used for manufacture of final products or for any other purpose connected with or related to the manufacture of the final products. The contention is that hence, the respondents are not entitled for the credit. 3. The contention of the respondents is that the canteen and office building is a part of the factory and under the Factory Act, it is essential to provide the canteen facility to the workmen. Therefore, as the same is a part of the factory and the electricity is used within the factory. Hence, the credit cannot be denied. It is also submitted that for the earlier period, there were four show cause notices issued for denying credit on the similar ground and the adjudicating authority dro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is further used in the canteen and office building is available to the manufacturer or not. 6. During the relevant period, the definition of inputs as provided under Rule 2(k)(i) of the Cenvat Credit Rules, 2004 is as under : "all goods, except light diesel oil, high speed diesel oil and motor spirit commonly known as petrol, used in or in relation to the manufacture of final products whether directly or indirectly and whether contained in the final product or not and includes lubricating oils, greases, cutting oil, coolants, accessories of the final products cleared along with the final product, goods used as paint, or as packing material, or as fuel, or for generation of electricity or steam used in or in relation to manufacture of fi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rpose within the factory premises is available. The Hon'ble High Court interpreted the words for "any other purpose" within the factory of production and held as under: "18. We have carefully considered the rival submissions. The basic dispute in the present case revolves on the meaning of the words "any other purpose" contained in Rule 57B(iv) of the Central Excise Rules, 1944 as well as similar Rule contained in the Cenvat Credit Rules, 2001 and Cenvat Credit Rules, 2002. During the period from 1997 to 2002 the electricity generated has been utilized by the assessee within the licensed premises for manufacture of final product and at the residential complexes. The question is, whether the assessee is entitled to the credit of duty paid ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... within the licensed premises would be entitle the assessee to avail credit of duty paid on furnace oil used in the manufacture of electricity supplied to the residential complexes. It is necessary to establish that the electricity is used for any purpose connected with or related to the production of final products. In our opinion, supply of electricity to the residential complexes situated within the factory premises are neither connected with or related to the production of the final products. In this view of the matter, we hold that the finding recorded by the Tribunal that the assessee is not entitled to the credit of duty paid on the furnace oil used in the generation of electricity supplied to the residential complexes cannot be faul ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nected with or related to the manufacture of final product. The use of electricity must have nexus with the goods manufactured in the factory. The appeal filed by Indo Rama Synthetics (India) Ltd. (supra) against the decision of the Bombay High Court is dismissed by the Hon'ble Supreme Court as noticed above. Hence, the ratio of the above decision is fully applicable on the facts of the present case and the credit in respect of duty paid on the goods or fuel used for generation of electricity which is further used in canteen or office building is not available to the respondent. The impugned order in this regard is set aside. 12. However, taking into account the overall facts and circumstances of the case, as earlier the four show cause n ..... X X X X Extracts X X X X X X X X Extracts X X X X
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