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TMI Blog2019 (12) TMI 527X X X X Extracts X X X X X X X X Extracts X X X X ..... ndisputedly used in the manufacture of electricity further used, inter alia, in the manufacture of dutiable goods within the factory premises, it cannot be said that such services were exclusively used in the manufacture of exempted goods - the treatment to these services in so far as credit is concerned can be no different than capital goods - credit allowed. CENVAT Credit - iron and steel articles used for repair and maintenance of capital Goods - time limitation - HELD THAT:- Having audited the records for the relevant period earlier and accepted the orders dropping the demand raised during the said period, full facts were within the knowledge of the department and Revenue now cannot claim suppression on the part of the Appellant while issuing the subsequent Notice dated 30 April 2014, with which we are concerned in the present proceedings, to justify invocation of extended period of limitation. The Commissioner misdirected himself in negating the challenge to invocation of extended period on the ground that the same set of invoices were not covered by the earlier proceedings - the demand on this count is set aside being barred by limitation. Scope of SCN - CENVAT Credit - ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... al goods as waste and scrap valued at ₹ 39,33,111 without payment of an amount of equal to Central Excise duty aggregating ₹ 4,05,110/- under Rule 3(5A) of the CCR. The demand comprised in all the 4 allegations was confirmed by the Adjudicating Authority vide Order-in- Original dated 29 January 2018. With respect to the First and Second issue, the Adjudicating Authority observed that credit on capital goods and input services used in the CPP could not be allowed under Rule 6(4) and Rule 6(5) respectively of the CCR having been exclusively used in the manufacture of electricity, which is an exempted goods. With respect to third issue, the Adjudicating Authority has observed that the iron and steel articles are general purpose items and their use in the repair and maintenance of capital goods do not make them eligible for Cenvat credit as capital goods or as inputs after 8 July 2009 and thereby confirmed the demand on both merits and on limitation. With respect to the fourth issue, the Adjudicating Authority has observed that sale of waste and scrap is an admitted fact and therefore, regardless of whether the said waste and scrap was of capital goods or otherwise excise d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the CCR having an overriding effect over Rule 6(1) to Rule 6(3) of the CCR. Such services were used in relation to the entire activity of the Appellant and could not be co-related with any particular revenue stream, while inviting out attention to CBEC Circular Nos. 137/203/2007 dt. 1 October 2007 and 868/6/2008-CX dt. 9 May 2008. Services covered by Rule 6(5) of the CCR could not be said to have been exclusively used in the manufacture of exempted goods i.e. electricity in the instant case when it is admitted that a part of such electricity was used in the manufacture of dutiable goods by inviting our attention to the decisions of the Tribunal in the case of Indo Rama Synthetics (I) Ltd. Vs. CCE reported in 2015 (39) STR 300. Third Issue Cenvat credit on iron and steel articles used for repair and maintenance of capital Goods Iron and steel articles were used for repair/maintenance of replacement of worn out parts of various capital goods identified as Exhibit D of the Appeal Petition and therefore, qualified as component parts and accessories of capital goods under Rule 2(a)(A) (iii) of the CCR. Bajaj Hundustan Ltd. Vs. CC ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... consideration in the present appeal. (a) Whether Cenvat credit of ₹ 3,09,46,548/- availed by the Appellant on capital goods used in the CPP for production of electricity is admissible to them in terms of the CCR. (b) Whether Cenvat credit of ₹ 7,12,624/- is available on the 17 specified services covered by Rule 6(5) of the CCR used in the generation of electricity within their CPP. (c) Whether Cenvat credit of ₹ 33,32,155/- availed on iron and steel articles used in repairs and maintenance of plant and machinery is available to the Appellant under the CCR. (d) Whether the Appellant was liable to pay an amount of ₹ 4,05,110/- under Rule 3(5) of the CCR on the clearance of waste and scrap. 8. We find that it is an undisputed and admitted position in the Notice dated 30 April 2014 as well as the Order-in-Original dated 29 January 2018 challenged before us that the electricity generated in the CPP was used within the factory premises, inter alia, in the manufacture of dutiable goods. If that be, so we are unable to appreciate the finding in the Order-in-Original that the capital goods within the CPP were exclusively ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion to the manufacture of exempted goods or providing exempted services. The Board at para 2 of its Circular dated 1 October 2017 has clarified that the purpose of identifying the 17 specified services for special dispensation is these services are similar in nature to capital goods, that cannot be apportioned for maintaining separate records. Since these input services were undisputedly used in the manufacture of electricity further used, inter alia, in the manufacture of dutiable goods within the factory premises, it cannot be said that such services were exclusively used in the manufacture of exempted goods. Therefore, the treatment to these services in so far as credit is concerned can be no different than capital goods and the Indo Rama case cited (supra) squarely covers the issue in favour of the Appellant. Accordingly, this issue is decided in favour of the Appellant. 10. With respect to the third issue, we find that Cenvat credit was sought to be denied on similar items for the same very period albeit concerning other invoices, also arising out of audit. While the demand for the period 2010 11 was dropped by the Adjudicating Authority himself vide o ..... X X X X Extracts X X X X X X X X Extracts X X X X
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