9911796707
TMI Blog2024 (4) TMI 1009X X X X Extracts X X X X X X X X Extracts X X X X ..... edit on inputs and input services used for the generation of electricity which, later on, is cleared to its sister unit situated at Urse and are liable to pay/reverse the Cenvat Credit involved in the said supply in terms of provisions of Rule 6(3A) of Cenvat Credit Rules, 2004 with interest and penalty. 2. The issue involved herein is whether Cenvat Credit on inputs and input service used for generation of electricity, is admissible to the appellant, which has been transferred (not sold) to its sister unit at Urse for manufacture of dutiable goods by them? 3. The facts leading to the filing of the instant appeal are stated in brief as follows. The appellants are engaged in the manufacture of PVC pipes, compounds, resins and fittings whic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 015, discontinued the reversal of cenvat credits on the inputs/input services used for generating electricity that was later on transferred to its sister concern at Urse and filed a written declaration with the jurisdictional authority as required u/r. 6(3A) ibid. 4. Not satisfied with the manner of calculation of the cenvat credit by the appellant, the department issued 4 (four) show cause notices to the appellant for the period from April, 2015 to June, 2017 and denied the same on the ground that it is not in accordance with Rule 6(3) (ii) ibid. Out of the 4 show cause notices as aforesaid, only 2 are in issue herein which are for the period April, 2016 to September, 2016 and October, 2016 to June, 2017 respectively as common Order-in-Or ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h interest and penalty. For arriving at the aforesaid conclusion the learned Commissioner relied upon the decision of the Hon'ble Supreme Court in the matter of M/s. Maruti Suzuki Ltd. vs. CCE, Delhi-III; 2009(240)ELT 641 (SC). 5. Learned counsel for the appellant submits that the demand has been proposed by the department u/r. 6(3) ibid @ 6% of the value of the electricity transferred by them to their sister unit at Urse and since it has been transferred free of cost, so the valuation has been arrived at by considering the value of electricity produced and sold by JSW Energy Ltd. to MSEDCL which is completely illogical. According to learned counsel, both the authorities below have proceeded on the assumption that during the period in issu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ccordingly therein the demand raised u/r. 6(3)(i) ibid on the ground that the appellants have not filed declaration u/r. 6(3)(ii) r/w rule 6(3A) ibid was held as erroneous. Now, in the instant matter, the issue remains is about the reversal of cenvat credit on the electricity transferred by the appellant to its sister unit at Urse for manufacture of dutiable goods. The demand has been proposed by the department u/r. 6(3) ibid @ 6% of the value of the electricity transferred by them to their sister unit at Urse. Since it has been transferred free of cost, so the valuation has been arrived at by considering the value of electricity produced and sold by JSW Energy Ltd. to MSEDCL which in my view, is not proper. Undisputedly the electricity has ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... for a price and has also cleared such electricity in favour of the grid for distribution. To that extent, in our view, assessee was not entitled to CENVAT credit...... " 7. In the case in hand there is no such allegation about sale of electricity in the show cause notices but authorities below have proceeded on the premise that during this period the appellant had sold the electricity to MSEDCL also. As per records, during the period in issue the electricity was supplied only to the sister unit at Urse and that too free of cost and in an identical situation this Tribunal in appellant's own case i.e. M/s. Finolex Industries Ltd. (supra) has held that no reversal needs to be made in respect of electricity supplied to their sister concern b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... transferred to sister unit, the inputs used in generating it to that extent is an input for the sister unit as it is relatable to the goods manufactured by it and they are not inputs relatable to the final products of this respondent. Each unit is separately registered and is a separate assessee as far as central excise is concerned. To that extent the electricity is sold to outsiders, the respondent has reversed the CENVAT credit. We find that on identical issue, High Court of Rajasthan had, in Shree Cements Ltd., allowed CENVAT credit on the inputs used in production of electricity which is supplied free of cost to the assessee's sister unit. A bench of this Tribunal has also taken similar view in Sanghi Industries, Bilag Industries, and ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
