2018 (5) TMI 1665

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....y within the factory. The electricity so generated is partly used for the manufacturing process within the factory and partly sold out to Maharashtra State Electricity Distribution Co. Ltd. (MSEDCL). The case of the department is that the electricity sold out to the electricity company is liable to payment of 6% amount in terms of Rule 6 (3) (i) of Cenvat Credit Rules, 2004. 2. None appeared on behalf of the appellants. 3. Shri A.B. Kulgod, Ld. Asst Commissioner (AR) appearing on behalf of the Revenue reiterates the findings in the impugned order. He further submits that as per instructions of explanation-1 vide Notification No.06/2015-CE (NT) dated 01/03/2015 in Rule 6 of Cenvat Credit Rules, 2004 for the purpose of Rule 2 (d) and (h....

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....manufacturer manufactures both the excisable dutiable final products and also manufactures excisable exempted goods. Furthermore, for the applicability of Rule 6, manufacture of dutiable goods and manufacture of exempted goods are condition precedent. Thus, the law is well settled that bagasse is not manufactured goods but is a waste product, which emerges/comes into existence in the process of manufacture of sugar. Hence, it is not manufacture of exempted goods. Similarly, electricity is not exempted excise goods as held by the Supreme Court in Solaris Chemicals Ltd. (supra). 25. It is not in dispute that petitioners do not avail Cenvat credit on any input and input services used in generation of electricity insofar as this fact h....

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....nputs which are used for manufacture of dutiable and exempted final products then the assssee is required to reverse the proportionate credit or pay 10%/5% amount of the value of the exempted final products. Electricity is not excisable goods under Section 2(d) of the Act, hence Rule 6 of the Cenvat Credit Rules, 2004 is not applicable as held by the Apex Court in the case of Solaris Chemtech Ltd. (supra). 29............. 30.............. 31.......... 32............ 33. At the cost of repetition, we may add that the electrical energy generated from Naphtha, furnace oil, coal, etc., has been included under Chapter 27 as excisable goods on which the excise duty is being paid and the credit is taken....