2019 (10) TMI 1103 - HC - Central Excise

High Court allows appeal withdrawal against CESTAT's Final Order, upholds Cenvat Credit demand, sets aside penalty.

The High Court allowed the withdrawal of the appeal filed by the Revenue against the CESTAT's Final Order. The CESTAT order was upheld regarding the ... Permission for withdrawal of appeal - monetary amount involved in the appeal - CENVAT Credit - electricity so generated and cleared/sold to the grid outside the factory can be treated as captively used for the manufacture of final products - inputs used in the power so generated - Rule 2 and 3 of CENVAT Credit Rules, 2004 - HELD THAT:- It is averred in the application that Central Board of Inidirect Taxes and Customs has issued instruction dated 22.8.2019 and revised the monetary limit for filing appeal before this Court to Rs.One Crore Only and these instructions are applicable on pending cases also. It is further averred that in view of the said instructions, the counsel has written instructions from the office of Commissioner of Central Goods and Service Tax, Rohtak vide letter dated 22.8.2019 to withdraw the present appeal, the amount involved being ₹ 54, 38, 492/-. Appeal dismissed as withdrawn. Issues:1. Appeal against CESTAT's Final Order2. Admissibility of Cenvat Credit on electricity generated outside the factoryAnalysis:1. The High Court heard an appeal filed by the Revenue challenging the Final Order dated 22.5.2015 passed by CESTAT, New Delhi. The CESTAT order allowed the appeal regarding the demand of Cenvat Credit amounting to Rs. 54,38,492 along with interest. However, the penalty equal to the Cenvat Credit amount, imposed by the Commissioner, Central Excise Commissionerate, Rohtak, was set aside. The substantial question of law for determination was whether electricity generated and sold outside the factory could be considered captively used for manufacturing final products, making the Cenvat Credit on inputs used in the power generation admissible under Rule 2 and 3 of CENVAT Credit Rules, 2004.2. Subsequently, an application was filed seeking permission to withdraw the appeal. The application cited an instruction issued by the Central Board of Indirect Taxes and Customs, revising the monetary limit for filing appeals before the Court to Rs. 1 crore. The counsel received instructions from the office of Commissioner of Central Goods and Service Tax, Rohtak, to withdraw the appeal due to the revised instructions. The amount involved in the appeal was Rs. 54,38,492. The application was supported by an affidavit from the petitioner's counsel. The Court, considering the application and affidavit, allowed the withdrawal of the appeal, leading to the dismissal of CEA No.64/2015.