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TMI Blog2025 (1) TMI 1439X X X X Extracts X X X X X X X X Extracts X X X X ..... bility. X X X X Extracts X X X X X X X X Extracts X X X X ..... 2003 under Section 14 of the Central Excise Act, 1944 stated that he was working as Incharge of Electricity Maintenance and admitted that the power cleared/injected by their Captive Power Plant to HSEB system was measured by Export Meter. On 21-8-03 he submitted the data sheet for fuel consumption in Captive Power Plant for the period from April, 2001 to March, 2003 and he further stated that the fuel consumption report in respect of Captive Power Plant before April, 2001 was not available with him. 5. Shri R.K. Gupta, General Manager (Excise) of the Party in his voluntary statement dated 24-07-2003 under Section 14 of the Central Excise Act, stated that they were using F.O., R.F.O. and L.D.O. for generation of power and after 1-3-03 the L.D.O. was not used and also stated that they were taking Modvat/CENVAT Credit on fuel for generation of power used in their Captive Power Plant for generation of power. On 28-07-2003 he stated that the power cleared/injected in HSEB system was adjusted in the Monthly Electricity Bill. On 21-8-03 he stated that they were taking CENVAT credit on fuel used for generation of power and for other purpose in the factory. He further stated that the pric ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ty cleared to HSEB (now DHBVNL) and the same was recoverable from them. (ii) The Party had suppressed these facts from Department that they were clearing/injecting the part of electricity generated by the Captive Power Plan (by using fuel on which Modvat/CENVAT credit had been taken and utilized) to HSEB. This fact of clearance of electricity to HSEB came to light only after the records were scrutinized by the Central Excise Officer which was detected after going through the discrete inquiry and verification of documents which were not submitted by the Party to the Deptt. It appeared that this act of omission and commission of the Party tantmounted to suppression of facts from the Department and the provisions of Rule 571 (1) (ii) of Central Excise Rules, 1944, Rule 57AH (2) of Central Excise (2nd amendment) Rules, 2000 and proviso to Section 11A (1) of Central Excise Act, 1944, were attracted wherein period of five years is invoke-able against the party. (iii) Shri R.K. Gupta, General Manager (Excise) Incharge of Central Excise matter of the Company dealing with day to day affairs of the Party was expected to inform this fact of using fuel in the generation of the electricity ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rial, or as fuel, or for generation of electricity or steam used for manufacture of final products or for any other purpose, within the factory of production. Explanation 1: The high speed diesel oil or motor spirit, commonly known as petrol, shall not be treated as an input for any purpose whatsoever. Explanation 2: Inputs includes goods used in the manufacture of capital goods which are further used in the factory of the manufacture." 15. From the definition of the Inputs, it is evident that Modvat/Cenvat credit is admissible on the inputs/goods which are used for generation of electricity, used for manufacture of final products within the factory of production. Thus there are two conditions/legs for allowing Modvat/ Cenvat Credit on the inputs/goods for the generation of electricity i.e. (1) inputs/goods should be used for the generation of electricity; and (ii) such electricity should be used for the manufacture of final products within the factory of production. I observe that the said party have fulfilled the first condition/leg because they have used the inputs/goods on which they have taken Modvat/Cenvat Credit for the generation of electricity. But they have fai ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 44, 57AB, 57AA of Central Excise (2nd amendment) Rules, 2000 and Rule 2 and 3 of the CENVAT Credit Rules, 2001, 2002 and 2004. 16. In their reply the party have submitted the circumstances under which they had not make arrangements for clearance of electricity generated by them in their captive power plant to HSEB as the electricity produced by them was not usable by them. The feasibility report of TCE has been submitted by them in support of their contention. They have tried to establish that they export the electricity generated by them to HSEB and receive the same back in usable condition but this plea of the party also does not hold good since they are not exporting whole of the electricity so generated but only a part of the same. Further as per the statement given by HSEB regarding month wise/ year wise report it is evident that all the power generated by Captive Power Plant of M/s JSL, Hisar is not exported/cleared to the HSEB Grid. But the arrangement of synchronization is such that only the excess power is being injected/cleared out to HSEB Grid from their factory. 17. Another contention raised by the party is that since no facts were suppressed from the Departmental a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... either in the reply to the SCN or at the time of personal hearing. * * * * 29. In view of the above discussions and findings and have regard to the facts and circumstances of the case I pass the following order: (I) I disallow Modvat/CENVAT Credit amounting Rs. 4,22,06,993/- (Rupees Four Crores Twenty-Two Lacs Six Thousand Nine Hundred and Ninety-Three only for the period Jan. 99 to June 03 and order for recovery of the same from the said party under Rule 571 (1) (11) of Central Excise Rules, 1944, Rule 57AH (2) of the Central Excise (2nd amendment) Rules, 2000 and Rule 12 of CENVAT Credit Rules, 2001 and 2002 read with proviso to Section 11A (1) of Central Excise Act, 1944, by invoking extended period of five years as proposed in show cause notice dt. 30.12.2003. (II) I disallow CENVAT Credit amounting to Rs. 70,74,874/- (Rupees Seventy Lacs Seventy Four Thousand Eight Hundred and Seventy four only) and Rs. 78,06,003/- (Rupees Seventy Eight Lacs Six Thousand and Three only) and order for recovery of the same from the said party under Rule 12 of the Cenvat Credit Rules, 2002 as proposed in the show Cause notice dt. 28.06.2004 and 28.12.2004 respectively. (III) I disallow ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt and evidence relied upon by adjudicating authority has not been dealt with or considered b) The findings of the learned Tribunal that respondent received the same quantity of electricity which was cleared to HSEB is also factually incorrect and contrary to the facts on record. The details of record of electricity supplied by the respondent to HSEB and received by the respondent from HSEB was the relied upon documents to the impugned show cause notice, which clearly showed that the quantity of electricity received and supplied by the respondent are different. c) The case of the department is that the electricity generated in captive plant was not used in or relation to manufacture of final products within the factory of production and rather sold to HSEB. As per explanation introduced in notification number 4/94 dated 01.03.1994 inputs used as fuel were entitled to Modvat credit, provided such fuels are either utilised directly or indirectly for generating electricity, as an intermediary product, and is integrally connected with several operations, which result in emergence of the final product, however, in the instant case, fuels used in the captive plant for generating elec ..... X X X X Extracts X X X X X X X X Extracts X X X X
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