TaxTMI Login
AI OCR ✕Convert scanned orders, printed notices, PDFs and images into clean, searchable, editable text within seconds. Starting at 2 Credits/page
Try Now →Just a moment...
AI OCR ✕Convert scanned orders, printed notices, PDFs and images into clean, searchable, editable text within seconds. Starting at 2 Credits/page
Try Now →
Press 'Enter' to add multiple search terms. Rules for Better Search
Use comma for multiple locations.
---------------- For section wise search only -----------------
Accuracy Level ~ 90%
of 
Press 'Enter' after typing page number.
of Press 'Enter' after typing page number.
No Folders have been created
Are you sure you want to delete "My most important" ?
NOTE:
of Press 'Enter' after typing page number.
of Press 'Enter' after typing page number.
All Case Laws
of Press 'Enter' after typing page number.
of Press 'Enter' after typing page number.
All Case Laws
Note
Bookmark
Share
Don't have an account? Register Here
of Press 'Enter' after typing page number.
Issues: Whether Modvat credit on inputs used for generation of steam and electricity could be denied or proportionate reversal demanded under Rule 57CC(1) on the ground that residual steam was cleared outside the factory or used in the dairy for milk pasteurisation and ghee manufacture.
Analysis: Rule 57B(1)(iv) permitted credit on specified inputs used for generation of electricity or steam where the electricity or steam was used in the manufacture of final products or for any other purpose within the factory. The inputs were used for generation of steam, and the steam was used for generation of electricity which was wholly consumed within the factory. Residual or exhausted steam was treated as a by-product, and the credit was protected by Rule 57D(i). On that footing, Rule 57C did not apply and, therefore, Rule 57CC(1), which presupposed the operation of Rule 57C, could not be invoked. Further, the demand based on transfer of steam between divisions failed because there was no sale price for such internal transfer, and the levy under Rule 57CC(1) lacked a supporting machinery provision.
Conclusion: The demand was unsustainable and the assessee was entitled to Modvat credit without reversal under Rule 57CC(1).
Final Conclusion: The impugned order was set aside and the appeal succeeded on the basis that the credit on inputs used for steam generation could not be denied merely because residual steam was later used or cleared, and the proportionate demand was not legally tenable.
Ratio Decidendi: Where inputs are used for generation of steam or electricity falling within the credit-entitling provision, subsequent use or clearance of residual steam as a by-product does not attract reversal under the provision governing exempted final products, and a demand under the proportionate reversal rule cannot survive without a proper statutory machinery.
TaxTMI 
TaxTMI 
