9911796707
TMI Blog2010 (7) TMI 963X X X X Extracts X X X X X X X X Extracts X X X X ..... FO), Light Diesel Oil (LDO), Low Sulphur Heavy Stock (LSHS), Bitmen, Benzene, Tolune, Hexane Special Boiling Spirits, Mineral Turbine Oil which are liable to duty and not wholly exempt from payment of duty. The appellants are also engaged in the manufacture of LPG, SKO and Naphtha. LPG cleared for supply to household and domestic consumer is exempt from payment of whole of the duty leviable thereon. LPG cleared for other purposes is dutiable and not exempt, SKO cleared for supply through Public Distribution System (PDS), is fully exempt from payment of duty, SKO cleared for other purposes is not exempt but dutiable.The appellants are also engaged in the manufacture of naphtha which is dutiable and not exempt from payment of duty, except whe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... G, SKO, Naphtha and BHSO. The quantum of common inputs on which credit is taken, is arrived at based on the ratio of the quantum of dutiable final products and the exempted final products cleared during the month. In this regard, the applicants have submitted a letter, dated 3-3-2006 to the Central Excise department. 2. The ld. Advocate submits that by the impugned order-in-original the Commissioner has confirmed the demand of duty on Bombay High Gas Oil (BHGO) and Naphtha manufactured by the appellants and used within the factory of the appellant for generation of that much quantity of electricity which is further used within the factory for the manufacture of the three exempted products mentioned above and in the administrative buildin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as reported in 2007 (219) E.L.T. 122. The appeal filed against this decision of High Court was dismissed by the Hon ble Supreme Court reported at 2008 (226) E.L.T. A181 (S.C.). The CESTAT in the case of Reliance Industries Ltd. v. CCE - 2008 (232) E.L.T. 751 has also held that in respect of inputs used for generation of electricity which is used within the factory credit is allowable. 5. Shri Kishorilal, the learned SDR appearing for the Department supports the impugned order and states that since the impugned goods namely Naphtha and BHGO has been used as fuel for generation of electricity, which in turn has been used for manufacture of exempt LPG, SKO and Naphtha for manufacture of fertilizer, the benefit of Notification No. 67/95 has ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... we find that though the main notification allowing exemption to captive consumption is not available in respect of inputs used in or in relation to exempted final products, the exception allows the exemption in respect of goods cleared by a manufacturer of dutiable and exempted final products after discharging the obligation under Rule 6 of the Cenvat Credit Rules. Prima facie, we find that the appellants are a manufacturer of dutiable and exempted final products and from the submissions made by the learned Advocate, we find that they have reversed the proportionate credit in respect of the exempted final products including products captively used and hence they are prima facie eligible to the claimed exemption under Notification No. 67/95 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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