Fuel-use Cenvat credit remains available for LSHS used to generate steam, despite an incorrect rule reference.

Under the applicable Cenvat scheme, duty-paid LSHS used as fuel or feed to generate steam within the factory qualified for credit because the rules expressly carved out fuel use from the input-credit restriction. The steam was consumed in manufacture of fertilizers, chemicals and electricity, bringing the input within the intended credit framework. A mistaken reference to Rule 57B did not vitiate the relief, since entitlement followed from the correct fuel exception in the operative rules. The text therefore records that credit on such fuel use could not be denied merely on account of an incorrect statutory citation in the order.

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Issues: Whether Cenvat credit could be denied on duty-paid LSHS used as fuel/feed for generating steam used within the plant, and whether the Tribunal's reference to Rule 57B vitiated the relief granted.

Analysis: During the relevant period, the Cenvat scheme under the Central Excise Rules, 1944 contained Rules 57AA to 57AK. Rule 57AA(d) defined input, credit was provided under Rule 57AB, the conditions for availment were in Rule 57AC, and Rule 57AD dealt with goods used for dutiable and exempted products. The scheme carved out an exception where the input was intended to be used as fuel. The factual finding was that LSHS was used as fuel/feed for generation of steam, and the steam was consumed within the factory for manufacture of fertilizers, chemicals, and electricity.

Conclusion: Credit could not be denied merely because the Tribunal referred to Rule 57B instead of the correct provisions, since the entitlement followed from the fuel exception under the applicable Cenvat rules.

Final Conclusion: The Revenue failed to show any substantial question of law, and the assessee's availment of credit on the input used as fuel was upheld.

Ratio Decidendi: Where an input is used as fuel within the factory and the applicable Cenvat rules expressly exclude such fuel use from the restriction on credit, credit cannot be denied on the ground of an incorrect statutory reference in the order.

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