TaxTMI 
TaxTMI 
2010 (7) TMI 963
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.... the manufacture of Motor Spirit (MS), High Speed Oil (HSD) and Aviation Turbine Fuel (ATF), Furnace Oil (FO), Light Diesel Oil (LDO), Low Sulphur Heavy Stock (LSHS), Bitmen, Benzene, Tolune, Hexane Special Boiling Spirits, Mineral Turbine Oil which are liable to duty and not wholly exempt from payment of duty. The appellants are also engaged in the manufacture of LPG, SKO and Naphtha. LPG cleared for supply to household and domestic consumer is exempt from payment of whole of the duty leviable thereon. LPG cleared for other purposes is dutiable and not exempt, SKO cleared for supply through Public Distribution System (PDS), is fully exempt from payment of duty, SKO cleared for other purposes is not exempt but dutiable.The appellants are al....
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....ipt of the said inputs in the refinery and not taken credit on the quantity of common inputs used in the manufacture of exempted LPG, SKO, Naphtha and BHSO. The quantum of common inputs on which credit is taken, is arrived at based on the ratio of the quantum of dutiable final products and the exempted final products cleared during the month. In this regard, the applicants have submitted a letter, dated 3-3-2006 to the Central Excise department. 2. The ld. Advocate submits that by the impugned order-in-original the Commissioner has confirmed the demand of duty on Bombay High Gas Oil (BHGO) and Naphtha manufactured by the appellants and used within the factory of the appellant for generation of that much quantity of electricity which....
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....ed for generation of such electricity which is used within the factory credit was allowable. The aforesaid decision in the case of Indorama Synthetics was upheld by High Court of Bombay as reported in 2007 (219) E.L.T. 122. The appeal filed against this decision of High Court was dismissed by the Hon'ble Supreme Court reported at 2008 (226) E.L.T. A181 (S.C.). The CESTAT in the case of Reliance Industries Ltd. v. CCE - 2008 (232) E.L.T. 751 has also held that in respect of inputs used for generation of electricity which is used within the factory credit is allowable. 5. Shri Kishorilal, the learned SDR appearing for the Department supports the impugned order and states that since the impugned goods namely Naphtha and BHGO has been u....
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....g an assessee to reverse proportionate credit in respect of the inputs used in exempted goods. Taking note of these two amendments and going by the specific language of the Notification No. 67/95, we find that though the main notification allowing exemption to captive consumption is not available in respect of inputs used in or in relation to exempted final products, the exception allows the exemption in respect of goods cleared by a manufacturer of dutiable and exempted final products after discharging the obligation under Rule 6 of the Cenvat Credit Rules. Prima facie, we find that the appellants are a manufacturer of dutiable and exempted final products and from the submissions made by the learned Advocate, we find that they have reverse....