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TMI Blog2023 (3) TMI 1478X X X X Extracts X X X X X X X X Extracts X X X X ..... ue that merely by analogy even if in one provision both the terms have been used, the same should be read in the other provision as well, where it has not been specifically mentioned, has no legs to stand, as the tax cannot be levied merely by inference or presumption. There are no merits in the impugned order whereby the reversal has been sought to be made in terms of the Rule 6 of the CENVAT Credit Rules, 2004 by treating such removals to be trading in inputs. It is also settled position in law as per the following decisions that the substantial benefit of proportionate reversal should not be disallowed to the appellants just for reason of procedural irregularities such as non filing of prior declaration or intimation - the demand raised under Rule 6(3)(i) on the ground that the appellants have not filed declaration under Rule 6(3)(ii) read with Rule 6(3A) of CCR, 2004 is erroneous. The matter needs to be reconsidered by the original authority for determination of the amount to be reversed against the electricity wheeled out to MSEDCL against a price, by application of the formula as prescribed by Rule 6 (3) (ii) read with Rule 6 (3A) - Appeals is allowed and the matter remanded ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eing issued without prejudice to any other action that may be initiated under the provisions of the Central Excise Law or any other law for time being in force. 2.1 The appellants are engaged in the manufacture of PVC pipes, compounds, resins and fittings, falling under Chapter 39 of the Central Excise Tariff Act, 1985, which are chargeable to excise duty (hereinafter referred to as dutiable products ). 2.2 An intelligence received indicated Appellant are availing Cenvat Credit on input services attributable to imported Ethylene Dichloride but are not paying an amount equal to 5% on the difference between sale price and purchase price of the Ethylene Dichloride(EDC) which is sold (Traded) by them after its importation. 2.3 Based on above investigations were undertaken and it was observed that the assessee - i. Manufacture both dutiable and exempted excisable goods, ii. Are engaged in trading of Cenvat inputs and avail Cenvat credit on the inputs and input services, which are common for both the activities mentioned at above and therefore the provisions of Rule 6 of Cenvat Credit Rules 2004 are rightly applicable to them. The result of investigations showed that for the above said f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re, demand under Rule 6(3) is not maintainable in respect of EDC cleared as such. In fact, at the time of removal of EDC as such, the appellants paid an amount equal to the credit availed in respect of such inputs at the time of removal in terms of Rule 3(5) of CCR, 2004. There is no provision in Cenvat Credit Rules for reversal of credit taken on input services used in relation to those inputs which are subsequently removed as such and therefore, there is no requirement to reverse the credit taken on common services to the extent attributable to purchase and sale of EDC as have been held in the in various decisions. ► Without prejudice to the above submissions, the option of proportionate reversal is available with the appellants for alleged trading activity. The conditions and procedures prescribed under Rule 6(3A) are procedural in nature. Therefore, non-filing of declaration is merely procedural irregularities which cannot take away substantive benefits under the CCR, 2004. ► Without prejudice to other submissions, trading is covered under 'exempted services' only from 1.4.2011 and the amendment cannot be given retrospective effect. ► Without prejudice ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... only talks about the Cenvat credit taken on inputs or capital goods. It does not refer to the Cenvat on input service, whereas Rule 5, on which reliance is sought to be placed by the Revenue, specifically talks about the Cenvat credit on any input or input service used in the manufacture of final product. This rule pertains to refund in case of exports, which stands altogether on different footings. Once the rule-making authority has defined the terms specifically and used the same in different provisions consciously, the argument of learned counsel for the Revenue that merely by analogy even if in one provision both the terms have been used, the same should be read in the other provision as well, where it has not been specifically mentioned, has no legs to stand, as the tax cannot be levied merely by inference or presumption. It is not possible to assume any intention or governing purpose of the statute more than what is stated in the plain language. Words cannot be added or substituted so as to give a particular meaning. 4.3 Similar view is also taken in the following decisions: i. Exide Industries Ltd. [2018 (4) TMI 655 - CESTAT MUMBAI] ii. UP Telelinks 2015 (329) ELT 888 (T) ii ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (55) E.L.T. 444 (S.C.) the test laid down by this Court is whether the process and the use are integrally connected. As stated above, electricity generation is more of a process having its own economics. Applying the said test, we hold that when the electricity generation is a captive arrangement and the requirement is for carrying out the manufacturing activity, the electricity generation also forms part of the manufacturing activity and the input used in that electricity generation is an input used in the manufacture of final product. However, to the extent the excess electricity is cleared to the grid for distribution or to the joint ventures, vendors, and that too for a price (sale) the process and the use test fails. In such a case, the nexus between the process and the use gets disconnected. In such a case, it cannot be said that electricity generated is used in or in relation to the manufacture of final product, within the factory . Therefore, to the extent of the clearance of excess electricity outside the factory to the joint ventures, vendors, grid etc. would not be admissible for CENVAT credit as such wheeled out electricity, cleared for a price, would not fall within t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eversed against the electricity wheeled out to MSEDCL against a price, by application of the formula as prescribed by Rule 6 (3) (ii) read with Rule 6 (3A). Appellant have submitted that they have reversed the proportionate credit of inputs and input services attributable to the electricity wheeled out as per the prescribed formula. The said formula has been interpreted by this tribunal in series of decisions and also the High Courts. The matter needs to be remanded back to determine as to what amount needs to be reversed by correct application of the formula. 4.9 We are also in agreement with the appellant submission that no reversal needs to be made in respect of electricity wheeled out to their sister concern in view of the following decisions. i. Hindustan Zinc Ltd. [2017 (4) TMI 841 - CESTAT NEW DELHI] ii. Shree Cement Ltd. [2017 (6) TMI 502 - CESTAT NEW DELHI] iii. Sanghi Industries Ltd. [2014 (302) E.L.T. 564 (T)] iv. Hindustan Zinc Limited [2017 (4) TMI 1512 - CESTAT, NEW DELHI] 4.10 Thus we are of the view that matter needs to be remanded back to the original authority to determine amounts to be reversed by the appellant in view of the observations made in para 4.8 and 4.9 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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