2014 (7) TMI 441

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....rty one lakhs twenty four thousand only and three hundred forty only) alongwith interest and penalty of Rs. 10,00,000/- (Rupees ten lakhs only). 2. Facts are briefly recapitulated that the respondents were manufacturers of goods falling under heading 72 of the First Schedule to the Central Excise Tariff Act, 1985. They were also generating electricity inside their factory premises for production of their goods of chapter heading 72. They have also been availing Cenvat credit of duty paid on inputs used for generation of electricity. 3. A show cause notice dated 17.03.2006 was issued to the respondents covering the period March 2005 to June 2005 for contravention of the various provisions of Rule 6 of the Cenvat Credit Rules, 2002, as ....

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....notification issued under section 5A. One does not exempt a non excisable product. In view of this, rule 6 ibid does not apply to electricity generated and sold outside. Whatever credit has been availed on inputs and which are used for generation of electricity sold outside, the availment of such credit is not governed by the scheme of cenvat credit. Being outside the cenvat credit scheme, therefore, that part of the credit availed to be reversed. This is what the Appellant have done. They have reversed the credit in proportion to the electricity sold to M/s Raipur Alloys & Steel Ltd of the total electricity generated." 5. Department did not agree with the order of Commissioner (Appeals) on the ground that Commissioner (Appeals)'s co....

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....60000 of the Central Excise Tariff Act. It was also alleged that the respondent had not maintained separate accounts for the inputs which were used for generation of electricity that was sold outside, therefore, they were required to pay an amount equal to 10% of the value of electricity sold to outside buyers in terms of rule 6 of the Cenvat Credit Rules, 2002. 6. Shri J.M. Sharma, Counsel for the Respondent, however submitted that the dispute should be held to be resolved as they have already filed application, under Section 73 of the Finance Act, for option to reverse Cenvat Credit attributable to inputs used in exempted goods i.e. electricity wheeled out with the Commissioner and that the same has been accepted by the Commissioner, t....