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TMI Blog2014 (2) TMI 279X X X X Extracts X X X X X X X X Extracts X X X X ..... ortant point to be noted is that, in the present case, excess electricity has been cleared by the assessee at the agreed rate from time-to-time in favour of its joint ventures, vendors, etc. for a price and has also cleared such electricity in favour of the grid for distribution. To that extent, in our view, the assessee was not entitled to Cenvat credit - Following decision of Maruti Suzuki Limited v. Commissioner of Central Excise, Delhi-III [2009 (8) TMI 14 - SUPREME COURT] - Decided partly in favour of Revenue. - C.M.A. No. 2747 of 2008 - - - Dated:- 12-9-2011 - D. Murugesan and K.K. Sasidharan, JJ. Shri T.R. Senthil Kumar, S.C.C.G., for the Appellant. Shri R. Raghavan, for the Respondent. JUDGMENT This appeal at the i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... used as fuel in the manufacture of their final products and for generation of electricity. 3. The Commissioner of Central Excise, Chennai, issued a show cause notice to the assessee on 14 September 2000 calling upon them to show cause as to why the proportionate credit of duty on inputs used in the generation of electricity should not be recovered with interest and penalty. The assessee justified the credit of duty availed on inputs used in the generation of electricity and transferred outside the factory premises, on various grounds. 4. The Commissioner of Central Excise framed four issues for consideration. The first issue regarding the claim of duty credit paid on Naphtha and SKO and used for generation of electricity which was supp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and 4. 7. The Tribunal rejected the contention raised by the Revenue in respect of Issue No. 3. The Tribunal opined that the very same issue was earlier decided in favour of the assessee and accordingly, by following the said order, the finding with regard to Issue No. 3 was confirmed. With respect to Issue No. 4, the Tribunal arrived at a factual finding that there was no loss of revenue in the subject transaction and as such, the appeal has no merits. Accordingly, the decision on Issue No. 4 was also confirmed. The present appeal is directed against the said order. Substantial Questions :- 8. This Court while admitting the appeal, framed the following substantial questions of law :- (a) Whether the Appellate Tribunal is correct ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t was used for generation of electricity or not was immaterial. The Revenue contended that Naphtha is specifically covered by goods used for generation of electricity or steam used in the manufacture of final products or for any other purpose within the factory of production . Since Naphtha used in the subject case was for generation of electricity and it was not wholly used within the factory of production, Modvat credit would not be available for the proportionate quantity. The Tribunal by following the earlier decision simply rejected the appeal filed by the Revenue. 12. The very same issue was considered in another appeal between the very same parties in C.M.A. No. 1735/2006 and the matter was remanded for fresh consideration. 13. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d in the generation of electricity to the extent to which they are using the produced electricity within their factory (for captive consumption). They are not entitled to Cenvat credit to the extent of the excess electricity cleared at the contractual rates in favour of joint ventures, vendors, etc., which is sold at a price. 15. The decision of the Tribunal in Indian Organic Chemicals Ltd. v. Commissioner of Central Excise, Chennai [2005 (192) E.L.T. 487] is no longer valid in view of Maruti Suzuki. 16. The other issue regarding the manufacture and clearance of DM Water and DAS Water without required declaration under Rule 173B and without payment of duty was considered by the Commissioner and the Tribunal on facts, and both the autho ..... X X X X Extracts X X X X X X X X Extracts X X X X
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