2017 (7) TMI 680

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..... determining the credit which is not eligible, we remand the matter to the adjudicating authority to recompute the same - appeal allowed in part and part matter on remand.
Ms. Sulekha Beevi C.S., Member (Judicial) And Shri Madhu Mohan Damodhar, Member (Technical) Shri S. Muthuvenkataraman, Advocate for the Appellant Shri A. Cletus, Addl. Commissioner (AR) for the Respondent ORDER Per Bench The appellants are aggrieved by the order passed confirming the disallowance of CENVAT credit on input services based on the allegation that they have not maintained separate accounts for the common input services used for generation of electricity in their co-generation plant. 2. The appellants are manufactures of sugar and molasses and erected a .....

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..... ut services used for production of electricity captively consumed in their sugar factory. However, learned counsel fairly conceded that as per the above decisions, the appellant is not eligible to avail CENVAT credit on the input services pertaining to the quantum of electricity sold outside the factory to TNEB grid. He also relied upon the amendment to Rule 6 of CENVAT Credit Rules, 2044 by Notification No. 6/2015 dated 1.3.2015 whereby Explanation (1) was added to sub-rule (1) of Rule 6 of CENVAT Credit Rules. He argued that with effect from 1.4.2015, it is clarified that exempted goods or final products would include non-excisable goods cleared for consideration from the factory. That electricity would thus become exempted goods as per t .....

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..... ces are used in or in relation to the manufacture of excisable goods or for providing taxable services. Inasmuch as the appellant has utilized part of the inputs/input services in or in relation to the generation of electricity which has been sold, to that extent the appellant would not be eligible for taking of Cenvat credit on such inputs/input services used in the generation of electricity which has been sold to MSEB. Therefore the appellant would be liable to reverse the credit if any taken on such inputs/input services which have been used in the generation of electricity which have been sold to MSEB." 7. In the above cases, the Tribunal as well as the High Court have taken a view that the assessee has to reverse proportionate credit .....

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