Tribunal cancels 6% electricity value demand, citing misuse of common inputs. Precedents, rules, and amendments support appeal.

The Tribunal set aside the demand for 6% of electricity value due to alleged misuse of common input/services for manufacturing electricity. Relying on legal precedents and the 2016 amendment, the Tribunal found the demand unsustainable, allowing the appeal with consequential relief. The decision was based on the nature of electricity generation from waste products, the applicability of Rule 6 of CCR, 2004, and compliance with the 2016 amendment.

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Issues:
- Appeal against rejection of appeal by Commissioner(Appeals) regarding demand for 6% of electricity sale value due to alleged misuse of common input/services.

Analysis:
The appeal challenged the order of the Commissioner(Appeals) rejecting the appellant's appeal against a demand for 6% of the value of electricity sold, based on the allegation of misuse of common input/services for manufacturing electricity, an exempted product. The original authority confirmed the demand and imposed a penalty. The appellant argued that they did not avail CENVAT credit on inputs used for electricity generation and electricity, though a good, is not excisable. They contended that the waste products used for electricity generation do not fall under Rule 6 of CCR, 2004. The appellant cited precedents to support their arguments, emphasizing that the electricity generated was from waste products and the authorities ignored Rule 6(3AA) introduced in 2016, which the appellant had complied with by paying the due amount and interest.

The appellant further asserted that the electricity generated using waste products does not attract Rule 6 of CCR, 2004, citing judgments like UOI Vs. Hindustan Zinc Ltd. The appellant highlighted that coal ash and residual waste from burning coal are not final products, and the authorities failed to consider the 2016 amendment allowing for the reversal/payment of proportionate CENVAT credit. The Tribunal noted that in a previous case, it held that the appellant was not liable to pay 6% of electricity value cleared to the distribution company. Relying on legal precedents and the 2016 amendment, the Tribunal found the demand for 6% of electricity value unsustainable and set aside the impugned order, allowing the appellant's appeal with consequential relief.

In conclusion, the Tribunal's decision was based on the appellant's arguments regarding the nature of electricity generation from waste products, the applicability of Rule 6 of CCR, 2004, and compliance with the 2016 amendment. The Tribunal found in favor of the appellant, setting aside the demand for 6% of electricity value and providing relief accordingly.

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