TaxTMI 
TaxTMI 
2009 (8) TMI 510
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....brevity, 'the Tribunal'). 2. On 10-8-2006 the Division Bench admitted the instant appeal and directed the same to be listed along with C.E.A. No. 1 of 2006, wherein the following questions of law were framed for determination of this Court:- "1. Whether Tribunal is justified in vacating the demand when it has been proved on the record that party was availing Modvat credit on the inputs namely Residual Furnace Oil (R.F.O.) used as input for generation of steam used for manufacturing of dutiable as well as exempted goods and party was not maintaining any separate accounts of the said inputs being used in manufacture of exempted goods as per provisions of Rules 57CC(9)? 2. Whether party is liable to pay an amount of Rs.1,79,52,77,469/....
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....able as well as exempted excisable final products or the goods charged to nil rate of duty. It is noteworthy that the entire steam generated by using RFO as fuel is used by them in the manufacturing process only and no part of the steam so generated is used by respondent No. 1 for any other purpose whatsoever. This factual position is undisputed. Accordingly respondent No. 1 has been availing Modvat credit on the duty paid on RFA right from 1994. It was also found that the assessee-respondent No. 1 was not maintaining any separate records of the said inputs being used in the manufacture of exempted goods or goods charged to nil rate of duty as required under Rule 6(2) of the Rules, which was applicable at that point of time. It is the case ....
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.... 1. The Commissioner also imposed a penalty of Rs.6,24,731/-, which was equal to disallowed credit as provided under Rule 13(2) of the Rules read with Section 11AC of the Act. Charging and appropriation of interest under Rule 12 of the Rules read with Section 11AB of the Act was also ordered. However, in view of Board's Circular F. No. 591/28/2001-CX., dated 16-10-2001, the Commissioner has confirmed the demand of Rs.1,80,49,568/- only and the remaining demand of Rs.1,77,72,27,901/- was deemed to have been dropped (A-l). 6. Against the order dated 24-7-2003 (A-l) passed by the Commissioner, the assessee-respondent No. 1 preferred an appeal before the Tribunal. The Tribunal has allowed the appeal in terms of its final order dated 11-12-20....
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....4. In the light of the above, we set aside the order impugned and allow the appeal." 7. The aforementioned order passed by the Tribunal is subject matter of challenge in the instant appeal. 8. Having heard learned counsel for the parties and perusing the paper book with their able assistance we are of the considered view that there is no merit in the instant appeal and the same deserves to be dismissed. The controversy in the instant appeal centres around the issue as to whether the assessee-respondent No. 1 is entitled to the Modvat/Cenvat credit on the use of RFO for generation of steam, which was used for the manufacture of the final products both exempted and dutiable as required under the provisions of Rule 6 of the Rules. At the....
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.... receipt, consumption and inventory of inputs meant for use in the manufacture of dutiable final products and the quantity of inputs meant for use in the manufacture of exempted goods and take Cenvat credit only on that quantity of inputs which is intended for use in the manufacture of dutiable goods. In the present case, it is not in dispute that the assessee-respondent No. 1 has used the RFO as fuel only and not for any other purpose. 10. Rule 6 of the Rules is pari materia with Rule 57CC of the erstwhile Excise Rules. The relevant provision of Rule 57CC of the Excise Rules is reproduced as under for the facility of reference: "57CC. Adjustment of credit on inputs used in exempted final products or maintenance of separate inventory ....
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....res integra and is squarely covered by a Division Bench judgment of this Court (of which one of us M.M. Kumar, J. was a member) rendered in the case of CCE v. Super Auto (I) Ltd., 2008 (221) E.L.T. 41 (P & H) wherein after considering Rule 57CC of the Excise Rules it has been held that in cases where inputs are intended to be used as fuel, the provision of sub-rule (9) of Rule 57CC of the Excise Rules would not apply and the assessee would be entitled to avail credit of fuels even though part of it is used to manufacture of exempted final products. Moreover, we have already dismissed other appeals filed by the Revenue-appellant, namely, CEA Nos. 1, 42, 48 and 62 of 2006 against various identical orders passed by the Tribunal, vide detailed ....