2018 (9) TMI 164

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.... is burnt and the heat i.e. generated in the process of burning is utilized for generation of electricity. The electricity is partly utilized captively within the factory and part of it is sold outside the factory. The case of the department is that input Carbon Black Feed Stock is a common input which is used to manufacture dutiable final product namely, Carbon Black and Electricity which falls under Central Excise Tariff Heading 27160000 on which no rate of duty is prescribed. Therefore, the department contended that in respect of sale of electricity outside the factory, appellant is required to pay 6% in terms of Rule 6 of CENVAT Credit Rules, 2004. 2. Sh. J C Patel, Ld. Counsel appearing on behalf of the appellant at the outset submits....

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....d and therefore they are liable to pay the amount 8% / 10% on value of the electricity under Rule 6 of the Cenvat Credit Rules. The Learned Advocate for the appellant, relied upon the following decisions: 1. Hitech Carbon Vs CCE, Allahabad - 2003(161)ELY 407 (Tri.Del) 2. Rallis India Ltd Vs UOI - 2009(233)ELT 301 (Bom) 3. CCE, Vadodara 1 Vs Sterling Gelatin 0-2011(270) ELT.200(Guj) 4. UOI & Others Vs Hindustan Zinc Ltd - Civil Appeal No 8621 of 2010 (SC) 5. Ballarpur Industries Ltd Vs CCE Nagpur =-2006(205)ELT 483(Tri.Mum) 3. The learned Authorised Representative for the Revenue attempted to distinguish the decisions of the Tribunal in the case of Hi-tech Carbon (supra) on the ground that the Lean Gas is ultimately used in exemp....

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....ate of duty or is not specified as a final product under Rule 57A'. It is thus apparent from the provisions of Rule 57D(1) that the credit shall not be denied on the ground that part of the inputs is contained in a by-product. It is also not in dispute that by-product in the present matter namely, 'off gases' are burnt out which generate heat which in turn is used in the boiler to generate steam. No doubt the steam has been generated by the appellants as a conscious act but it cannot be claimed by the Revenue that any part of the inputs, that is CBFS or any other inputs which has gone into the manufacture of Carbon Black has been used in the manufacture of steam. For the purpose of applying the provisions of Rule 57C or Rule 57CC, it is the....