TaxTMI 
TaxTMI 
2019 (11) TMI 485
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....n both TG-1 and TG-2. A show cause notice dt.29.09.2006 was issued to the appellant seeking to deny Cenvat credit on both TG-1 & TG-2. After following due process, Cenvat credit on TG-1 was allowed by the original authority by Order-in-Original dt.08.06.2012 but they were denied Cenvat credit on TG-2. On appeal, this bench had remanded the matter back to the original authority which was adjudicated by the impugned order dt.03.09.2018. In this order, after considering all the submissions made by the appellant, learned Principal Commissioner has rejected the appellant's claim for Cenvat credit of capital goods on TG-2. 3. Learned counsel for the appellant submits that in the impugned order they have been denied Cenvat credit on the TG-2 despite the fact that the power generated from this set was also used for their sugar plant in addition to the power being supplied to the grid as per PPA. She submitted copies of power generation reports for both TG-1 & TG-2 on 10.01.2004, 30.04.2004, 18.01.2006 and 18.04.2006 to substantiate her claim. She would argue that in terms of Rule 6(4) of CCR 2004 "no Cenvat credit shall be allowed on capital goods which are used exclusively in the manuf....
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....otus Wireless Technologies vs CCE, Visakhapatnam [2016 (8) TMI 583 CESTAT Hyd] n. Crompton Greaves [2013 (296) ELT 470 (Tri-Mumbai)] 5. Per contra, learned departmental representative submitted that the basic document which shows about the installation of TG-1 and TG-2 sets is the PPA which the appellant had with the Transmission Corporation of Andhra Pradesh Ltd. This agreement, entered into on 29.03.2003 between the appellant and APTRANSCO, clearly indicates that TG-2 is to be installed in island mode independent of the remaining circuit and has to be aligned with the grid. He would draw the attention of the bench to Paras 3, 4, 2.2 and 2.5 of the agreement and Schedule-1 & Schedule-2B of the agreement which reads as follows: "3. APERC while issuing permission for Captive consumption in O.P.Nos.92 & 299/2000 dt.27.7.2002 indicated that utilisation of power to be generated from one 7 MW TG set to be run continuously in independent (Island) mode for Captive use and sell power from the second 7 MW TG set to the licensee as per PPA between the applicant and the licensee. 4. The Company also confirmed that the 2 Nos. 7 MW TG sets are electrically isolated....
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....vat credit on capital goods used exclusively for manufacture of exempted goods. In other words, if they are used for both manufacture of dutiable products and exempted products, the Cenvat credit on capital goods can be availed. In the present case, TG-2 has been installed in an island mode exclusively for supply of power to the grid as per the PPA. In fact, the clauses in the PPA indicate that there will be two TG sets and TG-2 has to run in an island mode and is meant only for supply of power to the grid. The appellant's argument is that they have some log books to show that they have connected TG-2 to the plant during some hours. Now the evidence before me is the PPA entered into between the appellant and APTRANSCO which clearly lays down that the TG-2 has to run in an island mode separate from the plant and on the other hand are some hand written foot notes in the log books made by the employees of the appellant that TG-2 was connected to the plant. There is nothing on record to show that PPA entered into has been modified and the clause requiring TG-2 to be in an island (isolated) mode has been modified to enable it to be interconnected with the sugar plant for use in the manu....
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....ken ineligible Cenvat credit with an intent to illegally avail Cenvat credit and to that extent evade payment of duty. I, therefore, find that the extended period of limitation has been correctly invoked and also the penalties have been correctly imposed upon the appellant. In view of the above, I find that the impugned order is correct and calls for no interference. 10. The impugned order is upheld and the appeal is rejected. (Pronounced in the open court on 08.11.2019) ============= Document 1 SCHEDULE 1 Particulars of the Project (referred to in the Preamble to the Agreement) Name of the Project Location No. of Units Capacity of each Generator Capacity of the Station Bagasse Based Govada (V). 1 7 MW 7 MW- Grid Co-generation Plant by M/s. The Chodavaram Chodavaram (M). Visakhapatnam Dist. connected, exportable Co-operative Sugars 1.id. power 6.25 MW (*) (*) The maximum exportable power to grid is 6.25 MW( from second TG set) is for sale to APTRANSCO. The Auxiliary consumption and Captive requirement to the power plant will be met from their first TG set running in independent (island....