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TMI Blog2009 (8) TMI 510X X X X Extracts X X X X X X X X Extracts X X X X ..... e Rules it has been held that in cases where inputs are intended to be used as fuel, the provision of sub-rule (9) of Rule 57CC of the Excise Rules would not apply and the assessee would be entitled to avail credit of fuels even though part of it is used to manufacture of exempted final products. Therefore, following the same reasoning and principle of law, especially when Rule 6 of the Rules is pari materia with Rule 57CC of the erstwhile Excise Rules, we have no other option but to dismiss the instant appeal. X X X X Extracts X X X X X X X X Extracts X X X X ..... availing Modvat credit on the duty paid on RFA right from 1994. It was also found that the assessee-respondent No. 1 was not maintaining any separate records of the said inputs being used in the manufacture of exempted goods or goods charged to nil rate of duty as required under Rule 6(2) of the Rules, which was applicable at that point of time. It is the case of the Revenue that from 1-7-2001 to 31-8-2001, the assessee-respondent No. 1 had cleared goods chargeable to nil rate of duty or exempt from the whole of the duty of excise in which common inputs had been used but for which no separate accounts had been maintained. Accordingly, it was liable to pay an amount equivalent to 8% of the price of the said exempted goods in terms of Rule 6(3)(b) of the Rules. 4. The Revenue-appellant issued show cause notice No.V (19 & 21)15/CE/28/Comm. Adj./CHD-II/2002/883-885, dated 1-8-2002, under Rule 12 of the Rules read with Section 11A of the Act, raising a demand for payment of duty of Rs.9,03,96,037/-. The Revenue-appellant also proposed penal action under Rules 25(a)(b) & (d) and 27 of the Central Excise Rules, 1944 (for brevity, 'the Excise Rules') as well as under Rules 12 and 13 of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ified duty shall be allowed in respect of inputs which are used for generation of electricity or steam, used for manufacture of final products or for any other purpose within the factory of production." In Navsari Oil Products Ltd. v. CCE, Surat, 1993 (53) RLT 96 we have taken the view that words "for any other purpose within the factory of production" would take in manufacturing non-dutiable items also. The ratio of the above decision is directly applicable to the facts of the present case. 4. In the light of the above, we set aside the order impugned and allow the appeal." 7. The aforementioned order passed by the Tribunal is subject matter of challenge in the instant appeal. 8. Having heard learned counsel for the parties and perusing the paper book with their able assistance we are of the considered view that there is no merit in the instant appeal and the same deserves to be dismissed. The controversy in the instant appeal centres around the issue as to whether the assessee-respondent No. 1 is entitled to the Modvat/Cenvat credit on the use of RFO for generation of steam, which was used for the manufacture of the final products both exempted and dutiable as required under ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... product which is chargeable to duty as well as in any other final product which is not chargeable to duty and the manufacturer takes credit of the specified duty on any inputs (other than inputs used as fuel) which is used or ordinarily used in or in relation to the manufacture of both the aforesaid categories of final products, whether directly or indirectly and whether contained in the said final products or not, the manufacturer shall, unless the provisions of sub-rule (9) are complied with, pay an amount equal to eight per cent of the price (excluding sales tax and other taxes, if any, payable on such goods) of the second category of final products charges by the manufacturer for the sale of such goods at the time of their clearance from the factory. xxxx xxx xxxx xxx (9) In respect of inputs (other than inputs used as fuel) which are used in or in relation to the manufacture of any goods, which are exempt from the whole of the duty of excise leviable thereon or chargeable to Nil rate or duty, the manufacturer shall maintain separate inventory and accounts of the receipt and use of inputs for the aforesaid purpose and shall not take credit of the specified duty paid on such ..... X X X X Extracts X X X X X X X X Extracts X X X X
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