2006 (3) TMI 648

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....sed by them during July 2002 to May 2003, appropriate interest on the same and also imposing penalty of Rs. 20,000/- under Rule 13 of the Cenvat Credit Rules, 2002. The facts of the case are that MALCO, engaged in the manufacture of aluminium ingots, uses power as one of the raw materials, which they also generate in their captive power plant. The requirement of power is met by using the supply from Tamil Nadu Electricity Board (TNEB) and the power generated by their captive power plant (CPP), which has a capacity of 75 Mega Watts. For generation of power, they use fuels such as 'Petroleum Coke' and 'Superior Kerosene Oil'. The power generated is usually in excess of the requirement for use in the smelter and the same is supplied to another....

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....s exempted goods and was not required to reverse credit relatable to inputs used to generate exempted goods. She placed reliance on the following decision of the Tribunal:- Gujarat Narmada Fertilizers Co. Ltd. v. Commissioner of Central Excise, Vadodara [2004 (176) E.L.T. 200 (Tri. -Mumbai)], where the Tribunal had decided that as per the Rule 57AD, credit on fuels (LSHS in that case) was permissible as long as the fuel was used in the manufacture of steam, which was utilised in the factory. There was no dispute that steam was so used. Steam was used in the manufacture of fertilizers, chemicals as well as for generation of electricity. All the three uses were in the factory and what happened to the electricity manufactured from steam was....

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....ion of 'inputs' quoted in the order of the Commissioner reads as under :-           "inputs" means all goods, except [light speed oil] high speed diesel oil and motor spirit, commonly known as petrol, used in or in relation to the manufacture of final products whether directly or indirectly and whether contained in the final products or, and includes lubricating oils, greases, cutting oils and coolants and accessories of the final products cleared along with the final product, goods used as paint, or as packing material or as fuel, or for generation of electricity or steam used for manufacture of final products or for any other purpose, within the factory of production." According to her, i....