2019 (2) TMI 860 - AT - Central Excise

Tribunal rules in favor of appellant on CENVAT Credit Rules interpretation

The Tribunal allowed the appeal, setting aside the Commissioner (A)'s order and ruling in favor of the appellant regarding the interpretation of Rule 6(3) ... CENVAT credit - sale of surplus electrical energy to outside power distribution agency or supplied to its own colonies, generated at appellant’s factory premises w.e.f 1.3.2015 - applicability of Rule 6(3) of CENVAT Credit Rules, 2004 - Held that:- This issue has already been decided in favour of the appellant in appellant’s own case M/S. VENKATESHWARA POWER PROJECTS LTD., M/S. THE UGAR SUGAR WORKS LTD., M/S. EID PARRY (INDIA) LTD., M/S. SRI SRIVSGAR SUGAR & AGRO PRODUCTS LTD. VERSUS COMMISSIONER OF CENTRAL GOODS & SERVICE TAX [2018 (11) TMI 913 - CESTAT BANGALORE], where it was held that there cannot be a demand of 6% of the value of exempted electricity sold outside the factory in terms of Rule 6(3) (i) of CCR simply on the ground that the appellant has failed to maintain separate account on receipt of input or input services used in the manufacture of dutiable goods, namely, Sugar and exempted goods, namely, electricity - credit allowed - appeal allowed - decided in favor of appellant. Issues involved:Interpretation of Rule 6(3) of CENVAT Credit Rules, 2004 regarding the sale of surplus electrical energy generated at factory premises.Analysis:The appeal was filed against the Commissioner (A)'s order rejecting the appellant's appeal. The main issue was the applicability of Rule 6(3) of CENVAT Credit Rules, 2004 concerning the sale of surplus electrical energy generated at the appellant's factory premises from 1.3.2015. The Tribunal heard both parties and examined the records. The appellant's counsel argued that the issue had already been settled in favor of the assessee by the Tribunal in a previous case involving the appellant. The counsel cited various decisions, including Jakarya Sugars Ltd. vs. CCE, M/s. India Cane Power Ltd. & Others, and Shivratna Udyog Ltd. vs. CCE, where it was consistently held that Rule 6 of CENVAT Credit Rules, 2004 was not applicable to electricity sold outside.Upon reviewing the submissions and the material on record, the judicial member found that the issue had already been decided in favor of the appellant in a previous case involving the same party. Citing the precedents and decisions mentioned by the appellant's counsel, the judicial member set aside the impugned order and allowed the appeal of the appellant. The operative part of the order was pronounced in open court on 14/02/2019.