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TMI Blog2007 (9) TMI 182X X X X Extracts X X X X X X X X Extracts X X X X ..... appellants had availed input duty credit on Naphtha and Superior Kerosene Oil (SKO) used for generation of electricity which was supplied to M/s. Futura Polymers Ltd. (FPL for short), M/s. Futura Industries Ltd. (FIL, for short) and their own Silver Extraction Plant (M/s. FPL and the Silver Extraction Plant of the appellants were 100% EOUs and all the units were working in adjacent premises). They had also availed similar credit on Furnace Oil used for generation of steam which was supplied to M/s. FPL. The appellants had also cleared Demineralised Water (DM Water, for short) and Dealkanised Soft Water (DAS Water, for short) to M/s. FPL without payment of duty. The department issued show cause notice dated 14-9-2000 to the appellants propo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hich were utilised in the manufacture of electricity supplied to M/s. FIL and the Silver Extraction Plant of the appellants from February, 1998 to March, 2000. The Commissioner ordered recovery of this amount from the appellants under Rule 57-1(ii) read with Rule 57AH and also imposed equal amount of penalty on the party under Rule 57-1(4) read with Rule 173Q(l)(bb). Aggrieved by this decision of the Commissioner, the party filed Appeal No. E/123/2002 and the same was disposed of by this Bench as per Final Order No. 724/02, whereby the relevant issue [issue no. (2) ibid ]was remanded to the Commissioner for de novo adjudication. The department filed the present appeal (E/27/2003 against the decision of the Commissioner on issues (3) and (4 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e, Modvat credit would not be available to it. Both sides agree that naphtha was used as a fuel. At the same time, it was used for generation of electricity also. It is significant to note that the word 'fuel is not employed in clause (iv) of Rule 57B(1) or in the corresponding part of Rule 57AA(d). The relevant expression is "goods' used for generation of electricity or steam…… ". As "fuel" has already been specified under clause (iii) of Rule 57B(1) and in the corresponding part of Rule 57AA(d), it is obvious that the word "goods" used in clause (iv) of Rule 57B(1) and in the corresponding part of Rule 57AA(d) excludes fuel, and therefore, it should be considered as goods other than fuel, used for generation of electricity….. in the facto ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... llants had committed substantial violation of law. In the circumstances, the appellants should pay duty on DM Water and DAS Water cleared to M/s. FPL during the material period and they should also be penalised under Rule 173Q. These arguments of JCDR were opposed by the assessees counsel, who submitted that the benefit of exemption under the relevant Notification relating to 100% EOUs was not liable to be denied on technical grounds. In this connection, reliance was placed on the Supreme Court's judgment in Mangalore Chemicals Fertilizers Ltd. v. Deputy Commissioner of Customs [1991 (55) E.L.T. 437 (S.C.)] and Final Order No. 456/07 dated 20-4-2007 [2007 (214) E.L.T. 316 (Tri)] passed by this Bench in Appeal No. E/491/2000 [ Commiss ..... X X X X Extracts X X X X X X X X Extracts X X X X
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