Tribunal rules in favor of appellants, finding demand for 6% electricity sale value duty unsustainable.

The Tribunal allowed the appeals of the appellants, setting aside the impugned order and ruling that the demand for 6% of the sale value of electricity as a dutiable product was not legally sustainable. The Tribunal found that the issue had been conclusively settled in favor of the appellants in earlier cases, citing specific judgments and precedents. Based on established legal principles, the Tribunal held that the appellants were not liable to pay the demanded amount, thus favoring the appellants in the case.

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Issues:
- Appeal against the impugned order dated 9.8.2018 and 22/12/2017 passed by the Commissioner (A) rejecting the appeals of the appellant and upholding the Order-in-Original.
- Applicability of CENVAT credit under CENVAT Credit Rules, 2004 (CCR) for the manufacture of electricity used captively and sold to outside companies.
- Revenue raising demand of 6% of the sale value of electricity as a dutiable product.

Analysis:
The appellants, engaged in the manufacture of sugar, molasses, and ethyl alcohol, also produce electricity classified as electric energy under the Central Excise Tariff Act, 1985. They avail CENVAT credit under CCR and use the electricity captively for manufacturing excisable goods, selling the surplus to external power distribution companies. The Revenue demanded 6% of the sale value of electricity as a dutiable product.

During the hearing, the appellant's counsel argued that the impugned order lacked legal sustainability as it disregarded binding judicial precedents from the Tribunal and High Courts. Referring to previous cases, the counsel contended that the issue had been settled in favor of the assessee. In response, the learned AR supported the impugned order.

Upon evaluating the arguments and previous decisions, the Tribunal found that the issue was no longer res integra and had been resolved in favor of the appellant in earlier cases. Citing specific judgments and precedents, the Tribunal concluded that the demand for 6% of the value of electricity sold was not legally sustainable. Therefore, the Tribunal set aside the demand and allowed the appeals of the appellants, as the issue was decisively in their favor.

In the operative part of the Order pronounced on 26/02/2019, the Tribunal held that the impugned order was not legally sustainable and consequently set it aside, allowing both appeals of the appellants. This decision was based on the established legal principles and precedents cited during the proceedings, affirming the appellant's position regarding the demand raised by the Revenue for the sale of electricity.

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