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TMI Blog2008 (12) TMI 481X X X X Extracts X X X X X X X X Extracts X X X X ..... rs, a 100% EOU and a sister unit of the respondents, situated adjacent to it. The department was of the view that the CENVAT credit relatable to FO used in the manufacture of such quantity of steam as was diverted outside the factory had to be reversed by the respondents as the said quantity of FO had not been used in the production of its final products, cement and caustic soda. Accordingly a Show Cause Notice was issued. Adjudicating the Show Cause Notice, the original authority confirmed demand of Rs. 52,213/- being inadmissible CENVAT credit under Rule 12 of the CENVAT Credit Rules, 2002 (CCR) along with applicable interest under Rule 12 of CCR read with Section 11AB of the Central Excise Act, 1944 (the Act). He also imposed a penalty o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f electricity which had been disposed of otherwise than for use in the refinery. Final Order No. 1018/03, dated 28-11-03 in the case of M/s. Indian Organic Chemicals Ltd (now M/s. Futura Fibres, the respondents) had sustained Order-in-Appeal No. 72/02 (M-I), dated 30-9-2002. The Commissioner (Appeals) had held in that case after analyzing the provisions of Rule 57B(1) that the argument of the assessee, that credit was available to them on FO irrespective of the fact that steam or electricity generated out of such steam was used within the factory or not, was incorrect. In his view, clause (iii) of Rule 57B(1) of CER covered FO used for manufacture of final products without generation of electricity or steam. If the FO was used in the genera ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hich had held that goods used as fuel qualified for the entire credit irrespective of the further use and nature of the output. 1. Indian Organic Chemicals Ltd. v. CCE, 2005 (192) E.L.T. 487 (Tri.-Chen.). 2. CCE, v. Indian Organic Chemicals Ltd., 2008 (222) E.L.T. 559 (Tri.-Chen.). In both these decisions the Tribunal held that credit of duty paid on naptha was available to the assessee even though part of the steam generated using the naptha was diverted to another factory. This decision was on the basis that naptha was covered by expression goods used as fuel figuring at clause (iii) of Rule 57B(1) of CER at the material time. He submits that the impugned order passed relying on a decision of the Tribunal not challenged ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Both these covered goods used as fuel and preceded the entry relating to goods used for generation of electricity or steam, used for manufacture of final products or, for any other purpose, within the factory of production. In the Solaris Chemtech Ltd (supra), the Apex Court had dealt with an appeal filed by the revenue. The appeal had sought to deny credit relatable LSHS received by the respondents therein in generating electricity captively consumed in the manufacture of its final products. The respondents had claimed the benefit in terms of clause (c). The Apex Court held that LSHS so used had been used in or in relation to the manufacture of the final products and that MODVAT credit on LSHS used in production of electricity could not b ..... X X X X Extracts X X X X X X X X Extracts X X X X
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