2008 (6) TMI 198

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..... Rs. 81,60,990/- and imposed penalty of equal amounts under Rule 13 of Cenvat Credit Rules, 2002 along with interest. – Held that on a plain reading of the phrase “within the factory of production” means only such generation of electricity or steam, which is used within the factory would qualify as an intermediate product. The utilization of inputs in the generation steam or electricity used outside of the factory not being qualified by the phrase ‘within the factory of production’ - demand of duty alongwith interest are upheld. The penalties are set aside.
S/Shri M. Veeraiyan, Member (T) and P.K. Das, Member (J) Shri Ravi Raghavan, Advocate, for the Appellant. Shri V. Chaudhary, Jt. CDR, for the Respondent. [Order per : P.K. Das, Memb .....

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..... 2, assessee is not liable to reverse credit on Furnace oil used in non-dutiable final goods. He fairly submits that the Hon'ble Supreme Court in the case of CCE, v. Solaris Chemtech Ltd. reported in 2007 (214) E.L.T. 481 (S.C.) has held that inputs used in electricity generated which is consumed by residential colony of factory workers, schools etc. are not eligible for availing Cenvat credit. He submits that in the present case, the appellants supplied electricity to the Joint Venture and vendors for manufacturing parts, which were subsequently returned to them and therefore, the decision of the Hon'ble Supreme Court in the case of Solaris Chemtech Ltd. is not applicable herein. 4. The learned Jt. CDR on behalf of the Revenue, reiterates .....

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..... . The instant appeals relate to denial of credit on Naptha used as fuel for generation of electricity, which has not been subsequently used in the factory of production, and sold/supplied to appellants vendors/joint ventures outside the factory. It is admitted position that naptha used in generation of electricity is non-excisable. 6. In the case of Vikram Cement Ltd. (supra), the Hon'ble Supreme Court observed that on a plain reading of the phrase "within the factory of production" means only such generation of electricity or steam, which is used within the factory would qualify as an intermediate product. The utilization of inputs in the generation steam or electricity used outside of the factory not being qualified by the phrase 'within .....

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