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TMI Blog2011 (3) TMI 284X X X X Extracts X X X X X X X X Extracts X X X X ..... ad not maintained the separate inventory and the receipt and use of common input namely sodium hydroxide used in the manufacture of dutiable as well as exempted products. The respondents contested the proceedings by filing reply dated 11/14-12-1998. 2. The DR placing reliance in the decision in the matter of Hind Lamps Ltd. vs. C.C.E., Kanpur reported in 2010 (250) ELT 237 (Tri.-Del.) and Maruti Suzuki Ltd. vs. C.C.E., Delhi III reported in 2009 (240) ELT 641 (SC) as well as C.C.E. vs. Gujarat Narmada Fertilizers Co. Ltd. reported in 2009 (240) ELT 661 (SC) submitted that the Commissioner (Appeals) erred in setting aside the order passed by the adjudicating authority ignoring the facts that the steam produced with common inputs along with final product manufactured by the respondents was used captively as well as was cleared to others on receipt of consideration and being so, the respondents were duty bound to comply with the provision of Rule 57CC(1) read with sub-rule (9) thereof and this has been well settled by the decisions of the Apex Court in Maruti Suzuki Ltd. and Gujarat Narmada Fertilizers Co. Ltd. and further by the Tribunal in Hind Lamps Ltd. case. 3. On ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... had taken Modvat credit on certain quantity of inputs which were used in the generation of steam, which was cleared outside the factory without payment of duty. It is submitted that Rule 57CC(1) would be applicable only if Rule 57C can be made applicable and that the provisions of Rule 57C are not applicable to the present case, since Modvat credit as taken is specifically allowed in respect of goods used for generation of electricity or steam used in the manufacture of final product or for any other purpose of production under Rule 57B(1)(iv). In this view if the goods are used for generation of either electricity or steam, used in the manufacture of final product or for any other purpose within the factory of production, credit for the entire quantity of such goods is allowable and no part of such credit can be denied. 5. The Tribunal further observed thus 2.3?For the purpose of Rule 57B(1)(4) it is enough if either electricity or steam generated by use of inputs is used within the factory for the manufacture of final products or for any other purpose. In other words, even if part of the steam is cleared outside after the use of the steam in the generation of electricity, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... le for CENVAT credit as such wheeled out electricity, cleared for a price, would not fall within the definition of input in Rule 2(g) of the CENVAT Credit Rules, 2002. This view is also expressed in para 9 of the judgment of this Court in the case of Collector of Central Excise v. Solaris Chemtech Limited - 2007 (214) E.L.T. 481 (S.C.). Further, our view is supported by the observations of this Court in the case of Vikram Cement v. Commnr. of Central Excise, Indore - 2006 (194) E.L.T. 3 (S.C.) which is quoted below :- It appears to us on a plain reading of the clause that the phrase within the factory of production means only such generation of electricity or steam which is used within the factory would qualify as an immediate product. The utilization of inputs in the generation of steam or electricity not being qualified by the phrase within the factory of production could be outside the factory. Therefore, whatever goes into generation of electricity or steam which is used within the factory would be an input for the purposes of obtaining credit on the duty payable thereon. 8. Similarly, in Gujarat Narmada Fertilizers Co. Ltd. case, it was held as under:- 10.?In o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... credit in respect of the inputs utilised in duty free final products. The word shall , used in the said Rule with reference to the requirement of maintenance of separate account as well as with reference to obligation not to take credit of the specified duty paid on the inputs utilised in duty free final products, discloses the purpose and the mandatory nature of the said rule 10. It was also held by the Tribunal in Hind Lamps Ltd. case as under:- 18.?The opening sentence of Rule 57CC(1) clearly states that where a manufacturer is engaged in manufacture of any final product which is chargeable to duty as well as in any other final product which is exempt............ Apparently Rule 57CC does not merely relate to exempted final product or the product which is chargeable to nil rate of duty but the subject matter of the rule also includes the goods which are chargeable to duty. Undoubtedly, the liability to pay the amount in terms of the said rule would be on account of failure to comply with requirements of the sub-rule (9). Being so, it would not be correct to say that Rule 57CC applies only to exempted product or the product chargeable to nil rate of duty. In any ..... X X X X Extracts X X X X X X X X Extracts X X X X
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