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TMI Blog2013 (9) TMI 97X X X X Extracts X X X X X X X X Extracts X X X X ..... vailed capital goods cenvat credit amounting to Rs.1,50,84,086/- in respect of the same. The department being of the view that since these capital goods have been used for generation of electricity which is non-excisable and since bulk of the electricity generated was being sold to the State Electricity Board as during the period of dispute, the power generated by the captive power plant was in excess of the respondent's actual requirement issued a show cause notice for denying cenvat credit in respect of power generating machinery, its recovery along with interest and imposition of penalty. The show cause notice was adjudicated by the Commissioner vide order-in-original date 29.8.2001 by which the proceedings against the respondent were dr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed in their captive power plant, when the same was not being used for manufacturing/production of their excisable final product in the fact and circumstances of the case. (c) Whether MODVAT credit facility could have been claimed by the respondent contingently on the electricity being produced by them on the ground that it will be used for the manufacturing/production at some future date after the expansion of their sponge iron unit." 1.3 The Hon'ble Chattisgarh High Court decided the Department's appeal vide order dated 4.9.2012 setting aside the Tribunal's order and remanding the matter afresh in the light of the Apex Court's decision in the cases of - (a) Commissioner of Central Excise, Chennai-I Vs. Chennai ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nufacture of sponge iron and other steel products, that for this purpose only, they had augmented their power generation capacity as more power was going to be required for increasing their steel production, that just because during certain period, the power being generated by them was in excess of actual power requirement and excess power was sold to the State Electricity Board, the modvat credit cannot be denied, that in this regard, he relies upon the judgement of Hon'ble Chattisgarh High Court in the case of CCE, Raipur Vs. HEG Ltd., wherein it was held that cenvat credit would be admissible on the capital goods installed in the factory for captive power generation, even if, substantial portion of the electricity generated was being whe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l products for which they required more electricity and for this purpose only, their power generation electricity had been enhanced. Therefore, just because during the intervening period between installation of power generation machinery for generating additional power and installation of machinery for manufacture of sponge iron and other iron and steel products, the excess power being generated was being sold outside, the capital goods cenvat credit in respect of power generation machinery cannot be denied. We find that identical point of dispute was involved in the case of HEG Ltd. wherein Hon'ble Chattishgarh High Court vide judgement dated 30.09.2010 observing that the Apex Court's judgement in the case of Maruti Suzuki Ltd. is not appl ..... X X X X Extracts X X X X X X X X Extracts X X X X
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