TaxTMI 
TaxTMI 
2014 (1) TMI 1570
X X X X Extracts X X X X
X X X X Extracts X X X X
.... dated 7 November, 2003 on the file of the Commissioner (Appeals) rejecting the claim made by the assessee for Cenvat credit availed in favour of naphtha used for the generation of electricity and supplied to their units. Brief facts :- 2. The assessee M/s. Indian Organic Chemicals Ltd., are manufacturers of organic chemicals. During the period April, 2000 to March, 2001, they availed Cenvat credit of duty paid on naphtha used in generating electricity, which, besides being used within the factory of production, was also cleared for being used by other units. The assessing authority disallowed the credit to the assessee on the ground that naphtha used for generation of electricity was not covered by the definition of input under ....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... not? (b) Whether the Appellate Tribunal is correct in not taking into consideration that the naphtha is specifically covered by the expression "goods used for generation of electricity or steam used for manufacture of final products or for any other purpose, within the factory of production" and hence the credit on the quantum of naphtha, used as fuel used for generation of electricity, that was exported outside the factory, is not permissible?" Rival contentions :- 4. The learned counsel for the Revenue contended that the electricity generated by the assessee was sold to their sister units and as such, the assessee was entitled to only the proportionate Cenvat credit. The original authority and the ap....
X X X X Extracts X X X X
X X X X Extracts X X X X
....on to the manufacture of the final products, whether directly or indirectly and whether contained in the final products or not, namely :- (i) inputs which are manufactured and used within the factory of production; (ii) paints; (iii) inputs used as fuel; (iv) inputs used for generation of electricity or steam, used for manufacture of final products or for any other purpose, within the factory of production; (v) packing materials and materials from which such packing materials are made provided the cost of such packing materials is included in the value of the final product; (vi) accessories of the final product cleared alo....
X X X X Extracts X X X X
X X X X Extracts X X X X
....e issue raised by the assessee is no longer res integra in view of the decision of the Supreme Court in Maruti Suzuki Limited v. Commissioner of Central Excise, Delhi-III - (2009) 9 SCC 193 = 2009 (240) E.L.T. 641 (S.C.). 10. In Maruti Suzuki, the specific question was as to whether the Department was right in reversing proportionate Cenvat credit to the extent of power wheeled out by the appellant to its sister units, vendors, joint ventures. The Supreme Court considered the concept of input as defined under Rule 2(g) of Cenvat Credit Rules, 2002 and held that the assessee is entitled to credit of inputs utilized in the generation of electricity to the extent to which they are using the produce of electricity within their factory. ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....)(ii) contended that in case supply is to a 100% export oriented unit, the strict Rule of usage of the inputs used for generation of electricity used for manufacture of final product within the meaning of Section 57B(1)(iii) would not arise. The issue now raised by the assessee was not raised before the CESTAT. The CESTAT proceeded on the basis that naphtha was covered by the expression "goods used as fuel" and as such, it was eligible for Modvat credit irrespective of the nature of its use in the factory. The CESTAT in paragraph 4 of the order rec-orded that naphtha was used for generation of electricity and it was wholly used within the factory of production. The Supreme Court in Maruti Suzuki (cited supra) very clearly stated that in cas....