TaxTMI 
TaxTMI 
2018 (5) TMI 1416
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....(CBFS) and appellants availed credit on the same. During the course of audit, it was found that the appellants though availed full credit on inputs namely, CBFS, these inputs were used for manufacture of steam which was used for generation of electricity which was wheeled out outside to the Electricity Board. Department was of the view that the appellants are not eligible for credit on CBFS which is used for generation of electricity which is wheeled out. SCN was issued proposing to disallow the credit and for recovery of the same for the period September 2006 to December 2012 along with interest and for imposing penalty. After due process of law, the Commissioner confirmed the demand along with interest and imposed equal penalty. Hence thi....
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.... impugned order proceeds on the assumption that CBFS is an input used by appellant to generate steam/electricity. The input used in generation of steam / electricity is lean gas which is only by-product arising during the course of manufacture of carbon black. It is settled legal position that cenvat credit cannot be denied on inputs contained in waste / by-products. He placed reliance on the following case laws : (a) UOI Vs Hindustan Zinc Ltd. - 2014 (303) ELT 321 (SC) (b) CCE Pondicherry Vs EID Parry (I) Ltd. - 2013 (293) ELT 10 (Mad.) (c) Rallis India Vs UOI - 2009 (233) ELT 301 (Bom.) The above legal position has also been clarified by CBEC vide F.No.B-4/7/2000-TRU dated 03.04.2000. The analyzation by the C....
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.... is time-barred. There was no suppression whatsoever on the part of the appellants and the departmental authorities possessed full information with regard to the dispute raised in the present case. Appellants had reflected entire details in the returns filed by them; that there being no suppression extended period cannot be invoked. 3. Ld. A.R Shri K. Veerabhadra Reddy supported the findings in the impugned order. He referred to para 17.4 of the impugned order and submitted that though CBFS is used for manufacture of carbon black, the process of generation of electricity being a continuous one starts right from burning of CBFS and ends in manufacture of carbon black. The off gases / lean gases cannot be called as by-product and these are....
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....ufacturing the carbon black. Since it is not possible to release such lean gas to the atmosphere for environmental reasons, the appellant uses the same for generation of steam and electricity. The Hon'ble Apex Court affirmed the judgment of Bombay High Court in Rallis India Vs UOI (supra) by observing that it was only a technological necessity that these lean gases were to be used to generate heat for generation of electricity. The aforesaid decisions have been relied upon by the Hon'ble Allahabad High Court in the case of Hi-Tech Carbon (supra) wherein similar situation had come up for consideration. The Ld. A.R has objected the application of this judgment contending that the said decision pertains to the period when erstwhile Modvat Cred....