TaxTMI 
TaxTMI 
2009 (2) TMI 844
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....ut for generation of steam used for manufacturing of dutiable as well as exempted goods and party was not maintaining any separate accounts of the said inputs being used in manufacture of exempted goods as per provisions of Rules 57CC(9)? 2. Whether party is liable to pay an amount of ₹ 1,79,52,77,469/- (Rupees one crore seventy nine lakh (sic) only) which is equivalent to 8% of the price of said exempted goods in terms of rule 57CC(9) of the rules, which include the credit of ₹ 1,80,49,568/- (Rupees one crore eighty lakh forty nine thousand five hundred sixty eight only)?" On 10.8.2006 itself, CEA No. 62 of 2004 was also admitted by the Division Bench and the same was ordered to be heard alongwith CEA No. 1 of 2006. Subsequently on 21.9.2006 and 28.9.2006, CEA Nos. 48 and 42 of 2006 respectively were admitted by the Division Bench and the same were ordered to be heard alongwith CEA No. 62 of 2004. In this manner, all these appeals were clubbed together. Moreover, similar facts and common questions of law are involved in these appeals. However, the facts are being referred from CEA No. 1 of 2006. M/s Nestle India Ltd., Moga-respondent No. 1 is engaged in the manuf....
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.... issued periodical show cause notices to respondent No. 1 demanding 8% of the price of exempted goods manufactured by it by invoking Rule 57CC of the Excise Rules. The following seven show cause notices were issued:- Sr. No. Show Cause Notice No. Period Amount (in Rs.) 1. V(27) 15/CE/01/ADJ/CHDII/ 2000/ 960-64, dated 21.3.2001 1.9.96 - 31.7.98 104,39,18,081/- 2. V 30(27)D/30/47/99/1097-99 dated 3.3.1999 1.8.98 - 31.12.98 25,38,40,015/- 3. V (4)D/27/Nestle/ 99/3921-23 dated 31.7.1999 1.1.99 - 30.6.99 26,68,00,998/- 4. V(4)D/ 18/Nestle/2000/777-78dated 1.2.2000 1.9.99 - 31.2.99 10,37,06,426/- 5. V(21)15/ Central Excise/11/Adj/CHD-II/2001/1008-11,dated 25.1.01 1.1.2000 -31.3.2000 12,70,11,949/- 6. V(27)15/CE/25/ CHD-II/2001/ 1406-1410 dated 25.4.01 1.4.00 - 31.12.00 46,02,88,095/- 7. V(19&21) 15/CE/78/ Comm. Adj./CHD-II/02/883-885 dated 1.8.02 1.7.01 - 31.8.01 9,03,96,037/- On 25.4.2000, a show cause notice was issued raising a demand of ₹ 46,02,88,095/- under Rule 57AH of the Excise Rules read with Section 11A of the Act. The appellant also proposed penal action under Rule 173Q of the Excise Rules and payment of interest under Section 11AA/11....
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....ration of electricity or steam, used for manufacture of final products or for any other purpose within the factory of production." In Navsari Oil Products Ltd. Vs. CCE Surat 2993(53) RLT 96 we have taken the view that words "for any other purpose within the factory of production" would take in manufacturing non-dutiable items also. The ratio of the above decision is directly applicable to the facts of the present case. 4. In the light of the above, we set aside the order impugned and allow the appeal." Mr. Kamal Sehgal, learned counsel for the Revenue-appellant has argued that under Rule 57AD(2) of the Excise Rules which was applicable from 01.04.2000 to 31.12.2000, the assessee-respondent No. 1 had cleared the goods which were chargeable to nil rate of duty or which were exempted from whole of the duty of excise in which common inputs had been used. He has pointed out that no separate accounts had been maintained and accordingly the assessee-respondent No. 1 was liable to pay an amount equivalent to 8% of the price of the said exempted goods in terms of 57AD(2) of the Excise Rules. The learned counsel has contended that separate accounts were required to be maintained in r....
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....ise Rules would operate irrespective of the outcome of such a use as a fuel. In order to support his submission, learned counsel has placed reliance on a judgment of this Court rendered in case of CCE v. Super Auto (I) Ltd., 2008 (221)ELT 41 (P&H). Another submission made by the learned counsel is that RFO has been used inside the factory of respondent No. 1 in their boilers to generate steam for manufacturing of both dutiable and exempted final products. They have been receiving duty paid RFO and were availing Modvat credit thereon under the provisions of Rule 57B of the Excise Rules. The RFO was used for generation of steam which in turn was further used for manufacture of final products. The learned counsel has maintained that Rule 57B stipulates the eligibility to avail credit of duty on certain goods and the inputs used for the generation of the electricity or steam are specifically covered under Clause (iv) of sub-Rule (i) of Rule 57B of the Excise Rules. The said Rule allows credit on inputs used for generation of electricity or steam, which has been used for manufacture of final products or for any other purpose within the factory. Therefore, such inputs used for generatio....
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....hargeable to duty and the manufacturer takes credit of the specified duty on any inputs (other than inputs used as fuel) which is used or ordinarily used in or in relation to the manufacture of both the aforesaid categories of final products, whether directly or indirectly and whether contained in the said final products or not, the manufacturer shall, unless the provisions of sub-rule (9) are complied with, pay an amount equal to eight per cent of the price (excluding sales tax and other taxes, if any, payable on such goods) of the second category of final products charges by the manufacturer for the sale of such goods at the time of their clearance from the factory. xxxx xxx xxxx xxx (9) In respect of inputs (other than inputs used as fuel) which are used in or in relation to the manufacture of any goods, which are exempt from the whole of the duty of excise leviable thereon or chargeable to Nil rate or duty, the manufacturer shall maintain separate inventory and accounts of the receipt and use of inputs for the aforesaid purpose and shall not take credit of the specified duty paid on such inputs." (emphasis added). A perusal of the aforesaid Rules shows that the input....
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.... that separate inventory/accounts are required to be maintained in respect of the receipt and use of inputs for the aforesaid purpose. Such a manufacturer is restrained from taking credit of the specified duty paid on such items. 9. It is, thus, clear that the provisions of sub-rule (2) of Rule 57C and sub-rule (1) and (9) of Rule 57CC of the Rules do not apply to inputs intended to be used as fuel. In the instant case, there is categorical finding that furnace oil is used as 'fuel' only. Therefore, the view taken by the 'Tribunal' is unassailable and the respondent-assessee has been rightly held to be entitled to 'Modvat credit'. Therefore, the question of law is decided against the revenue by confining it to cases where the input is intended to be used as 'fuel' as the facts in present case reveal." On the aforesaid premise, we are of the view that the appeals filed by the revenue-appellant are without any substance and, thus, liable to be dismissed. We are also impressed with the submission made by the learned counsel for the assessee-respondent No. 1 that the RFO received by the manufacturer was duty paid and they were availing Modvat credit thereon under the provisions o....
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.... products, namely, fertilizers was concerned, the Tribunal relying upon an earlier decision of a larger Bench of the Tribunal in the case of Ballarpur Industries Limited v. Collector of Central Excise, Belgaum, 2000 (116) ELT 312 held that Assessee was entitled to modvat credit for LSHS. It was held by the Tribunal that the issue involved in the present case having already been concluded by a larger Bench of the Tribunal, the same was no longer res integra. It is pertinent to mention here that a batch of appeals filed against, amongst other cases, the decision in the case of Ballarpur Industries Limited (supra) has been dismissed by this Court, thus, upholding the law laid down by the Tribunal in the said case. 9. On the second contention raised by the Respondent, namely, that as per Rule 57B(1) (iv), the Modvat credit was available on the inputs used for generation of electricity or steam, used for manufacture of final products or for any other purpose, within the factory of production. The Tribunal decided the case in favour of the Assessee relying upon a decision of the Tribunal in the case of Raymond Ltd. Vs. Commissioner of Central Excise, Mumbai III, 2000 (37) RLT 447 (CEG....