2008 (6) TMI 426

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....ant fact that arise for consideration are the applicant herein is a manufacturer of petroleum products and has a refinery. The applicants were availing Modvat/Cenvat credit facility on the inputs purchased by them. The applicants herein put up captive power plant for the generation of electricity, which was used for the manufacturing purposes, both exempted and dutiable finished goods and was also used in the refinery premises for road lighting, canteen and administrative offices. On investigation the authorities came to the conclusion that applicant was utilizing intermediate products, which arises during the process of distillation of crude and was using this intermediate product for generation of electricity that was consumed in the refi....

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....trative block. He submits that the Revenue's case is that the final products manufactured out of the electricity so generated are cleared to fertilizer companies without payment of duty and hence applicants are required to reverse the Cenvat credit taken an inputs, as the applicants have not maintained separate account and inventory. It is his submission that the demand is also on the Naptha which is used for the manufacturing of products which are further cleared to fertilizer units without payment of duty. He submits that the issue in this case is squarely covered by the decision of the Tribunal in the case of Chennai Petroleum Corpn. Ltd. v. Commissioner of Central Excise, Chennai-I in final Order No. 63 to 67/05 dt. 7-1-2005 [2005 (187)....

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....e duty is on the inputs which were used by the applicant for the manufacture of electricity, which is further used in the road lighting, administrative building and for canteen purpose. It is his submission that the electricity used by the applicant for the manufacture of the final products which were cleared to fertilizer units are ineligible for availment of credit and hence the confirmation to demand is correct. It is his submission that the applicant could have resorted to the provisions of Rule 6 of Cenvat Credit Rules, 2004, which would have helped them, by maintaining separate accounts. Having not done so, the duty confirmed on the applicant is correct and they should be put to strict conditions. 5. Considered the submissions....