2008 (1) TMI 38

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....rted producing fuel themselves, which was being used by them captively in the above power plant.  They were availing the benefit of Notification No.67/95-CE, dt.16.3.95, in as much as the fuel was being used captively.  In as much as, a part of the fuel so used was for the manufacture of electricity, which in turn was used for residential purposes and supplied to Gujarat Electricity Board,, the benefit of said notification was not available.  2.         In view of the above, the appellants were issued 7 show cause notices, proposing demand of duty in respect of that part of the fuel used in the manufacture of electricity, which in turn has been used in the residential premises or sup....

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.... by limitation in as much as it was the appellant himself who expressed the doubt about the entitlement of notification in respect of that part of the fuel used for manufacture of electricity supplied to GEB grid or township.  He further submits that during the relevant period, there was a Tribunal's decision as well as High Court decision holding that such fuel is entitled to modvat credit and the law was only declared by the Hon'ble Supreme Court in the above referred case of Solaris Chemtech Ltd., in the year 2007.  For the similar reasons, he submits that there is no justification for imposition of penalty in respect of the balance 6 show cause notices in as much as the appellant was under a bonafide belief.  I....

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....d in the manufacture of electricity, supplied to GEB grid and township, vide their above referred letter.  Inspite of the doubt having been raised by the appellant themselves, show cause notice for the period July'99 to July00 was raised only on 4.9.01.  In such circumstances, it cannot be said that there was any suppression or malafide intention on the part of the appellant so as to justifiably invoke the longer period of limitation.              Apart from the above, we find that the Hon'ble Gujarat High Court in case of CCE Vs. Gujarat Narmada Fertilizers Co. Ltd. 2006 (193) ELT 136 (Guj.), has held that the fuel used in the dutiable as well as exempted fin....

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....enue was undoubtedly aware of the fact of supply of electricity by the appellant to GEB grid and residential colonies.  No objection was ever raised by them to availment of benefit of captive consumption notification in respect of such fuel so sued.  On the contrary, appellant themselves approached the Revenue and expressed doubt about such availment and also requested for provisional assessment till the issue is decided.  Can they be held guilty of any suppression or mis-statement, in such circumstances?  The answer would be a clear and exphatic No.  As such, we are of the view that the demand of duty raised on 4.9.01 for the period July1999 to July2000 is clearly barred by limitation.  We, accordingly, set ....