TaxTMI Login
Just a moment...
Press 'Enter' to add multiple search terms. Rules for Better Search
When case Id is present, search is done only for this
of 
of 
No Folders have been created
Are you sure you want to delete "My most important" ?
NOTE:
of of 
All Case Laws
of of All Case Laws
Note
Bookmark
Share
Don't have an account? Register Here
of <h1>Tribunal grants capital goods credit for co-generation plant components, dismisses penalties.</h1> <h3>KOTHARI SUGARS & CHEMICALS LTD. Versus COMMISSIONER OF C. EX., TRICHY</h3> KOTHARI SUGARS & CHEMICALS LTD. Versus COMMISSIONER OF C. EX., TRICHY - 2007 (220) E.L.T. 264 (Tri. - Chennai) Issues:1. Denial of capital goods credit on parts and components used for a co-generation plant.2. Imposition of penalties on the party.Analysis:Issue 1: Denial of capital goods credit on parts and components used for a co-generation plant:The appellants, engaged in sugar manufacturing with a co-generation plant, faced show-cause notices denying capital goods credit under Rule 51Q for parts used in the plant. The dispute arose as a portion of the electricity generated was supplied to Tamil Nadu Electricity Board (TNEB) grid. The Revenue contended that as per Rule 57R(2), all electricity generated should be consumed within the factory. The appellants challenged this, citing relevant case law. Previous tribunal decisions favored the appellants' position, allowing similar credits. The Tribunal noted that the denial of credit was not due to ineligible use of parts but because of electricity supply outside the factory. The consistent view was that Rule 57Q credit could not be denied based on Rule 57R(2) conditions. The Tribunal upheld the appellants' right to claim capital goods credit for the co-generation plant components, rejecting the Revenue's stance.Issue 2: Imposition of penalties on the party:The original authority denied penalties, but the department's appeals led to penalties being imposed on the appellants. However, the Tribunal's decision allowing capital goods credit also resulted in the dismissal of penalties. The Tribunal's ruling in favor of the appellants on the credit issue consequently led to the dismissal of penalties, thereby resolving both aspects of the dispute in the appellants' favor.In conclusion, the Tribunal allowed Appeal No. E/826/2003 regarding the denial of capital goods credit for the co-generation plant components, which also resulted in the dismissal of penalties imposed on the party. The decision was based on the interpretation of relevant rules and supported by previous tribunal decisions, ensuring the appellants' entitlement to the capital goods credit.
TaxTMI 