2012 (8) TMI 139

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....vailing benefit of exemption on inputs used in the production of LPG which also goes into the manufacture of Nitrogen and some parts of Nitrogen is used for degassing of wagons. The case of the Revenue is that as the appellant availed credit of duty paid on common inputs, therefore the appellant is liable to pay 10% of the price of the Nitrogen which goes into the process of degassing of wagons. Part of the demand is confirmed on the ground that the power generated in the captive power plant is used outside the factory of production i.e. in residential colony and the appellant is liable to pay 10% of the price of the electricity which is going outside the factory. The demand is also confirmed in respect of the electricity which is used for ....

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....the factory, the appellant relied upon the decision of the Hon ble Supreme Court in the case of Collector of Central Excise vs. Solaris Chemtech Ltd. 2007 (214) ELT 481 (S.C.) and in the case of Maruti Suzuki Ltd. 2009 (240) ELT 641. 5.2 It is also submitted by the appellant that the unit is a 100% EOU and the inputs used by the appellant in relation to the generation of electricity had been procured without payment of duty. In the circumstances, where the appellant used duty free inputs for generation of electricity used outside factory and where the appellant has not taken any credit on inputs used in relation to the generation of electricity, demand of duty by taking into the consideration 10% of the price of the electricity going out....

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.... 8. In respect of electricity used outside the factory of production as well as in respect of peripheral area in the factory, we find that the Revenue has confirmed the demand on the ground that the appellant is liable to pay 10% on the price of electricity which is used outside the factory. We find that this issue is now settled by the decision of Hon ble Supreme Court in the case of Solaris Chemtech Ltd. (supra) and of Maruti Suzuki Ltd. (supra) relied upon by the applicant wherein the Hon ble Supreme Court held that electricity is not an excisable item as per Section 3 of CEA, 1944 and the manufacturer is liable to reverse the credit on duty availed as inputs used in the generation of electricity which is not used in the factory of th....