2018 (6) TMI 724

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....e of cement and are registered with the Central excise department. They have a captive power plant and till 2509.2012 they were consuming the entire quantity of electricity generated in the power plant. From 26.09.2012 a portion of the power generated was wheeled out to TNEB grid and equivalent quantity of power was allowed by TNEB to be drawn at the assessee's own other plants situated in other place by virtue of agreement entered with TNEB. During verification of accounts, it was noticed that appellants were using common inputs and input services for both manufacture of cement and generation of electricity and were also availing credit on such inputs/input services. Department was of the view that since a portion of electricity is whe....

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....inst rejection of refund claim for the period 12/2013 to 10/2014 (Rs.75,04,407/-). 2.3 Similarly, the appellant filed refund claim of Rs. 84,99,343/- on 21.12.2015 for the period 11/2014 to 7/2015 and another claim of Rs. 46,38,324/- for the period from 8/2015 to 1/2016 being the credit availed on inputs/input services attributable to the quantity of electricity wheeled out to TNEB and reversed by them later. The refund claims were rejected by the original authority holding that the refund claims are premature. The appellants filed appeal before the Commissioner (Appeals) and vide common Order-in-Appeal No. 36-37/2017 dt.21.04.2017, the Commissioner (Appeals) held that appellants are eligible for credit on the input/input services used for....

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....mption should be adjusted on unit to unit basis. In para-70f the statement of facts, appellant has conceded that they had wheeled out electrical energy to TANGEDCO adjusting against the other units of the appellant at Shankari, Salem district, Dalavoi, Perambalur district and Chennai from 26.09.2012. There was thus adjustment between "appellant and TANGEDCO" in respect of electricity wheeled out by them and thereafter supplied by them to sister units. It is definitely not the appellant's case that the electricity wheeled out was supplied free or without any adjustment towards cost of the goods of the units wheeled out. In this scenario, the ratio laid down by the Hon'ble Apex Court in the cases of Maruti and Ultratech (discussed sup....

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....rd transportation thereof was not an input service. 18. Even on facts, the appellant cannot succeed. There is nothing on record to establish that it was the electricity wheeled out that was used by the third parties to manufacture the products used by the appellant in turn for the manufacture of its final product. Electricity like money would lose its identity once it is used with electricity obtained from other sources. The question of apportionment would, however, arise for instance if some nexus is established between the final product of the third party sold to the assessee and the electricity sold to it by the assessee. A case to this effect is not established. 22. The assessee having sold the electricity to the third parties lost ....