Rule 57CC credit restriction applies when steam made from common inputs is partly sold outside the factory, requiring separate accounts.

Rule 57CC was treated as mandatory where common inputs were used to generate steam for both captive consumption and sale outside the factory for consideration. The earlier captive-use precedent was distinguished because the present facts involved external clearances, breaking the nexus for full credit entitlement. Rule 57D did not override the requirement to maintain separate accounts under Rule 57CC, so credit was inadmissible to the extent of the outside clearance and the protection claimed by the assessee was unavailable.

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Issues: Whether Rule 57CC applied where steam generated with common inputs was partly captively consumed and partly sold outside the factory for consideration, and whether relief could be claimed under Rule 57B(i)(iv) or Rule 57D(1).

Analysis: The requirement under Rule 57CC(1) read with sub-rule (9) was treated as mandatory where common inputs were used for both dutiable and exempted outputs or where the output generated from such inputs was not wholly confined to captive use. The earlier decision relied upon by the assessee was distinguished because it proceeded on a factual premise of captive use within the factory, whereas the present case involved clearances of steam outside the factory for value. The reasoning in the later Supreme Court decisions was applied to hold that once the process and use nexus is broken by sale outside the factory, credit is not admissible to that extent and Rule 57D cannot dilute the obligation to maintain separate accounts under Rule 57CC.

Conclusion: Rule 57CC applied, the assessee was not entitled to the claimed protection, and the order of the adjudicating authority was restored in favour of Revenue.

Ratio Decidendi: Where inputs used to generate steam or electricity are employed for both captive use and external sale for consideration, the credit entitlement is governed by Rule 57CC and is not saved by Rule 57D; the assessee must comply with the mandatory separate-accounting requirement, and credit is inadmissible to the extent of the outside clearance.

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