TaxTMI 
TaxTMI 
2019 (12) TMI 527
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....oard. 3. Pursuant to an audit of the Central Excise records for the financial year 2009-10 and 2010-11, the Appellant was served with a Show-cause Notice dated 30 April 2014 inter alia proposing denial of Cenvat credit aggregating Rs. 3,16,59,172 in respect of the capital goods (involving credit of Rs. 3,09,46,548) and input services (involving credit of Rs. 7,12,624). Cenvat credit of Rs. 33,32,155 availed on iron and steel articles such as Joist, Angles, Channels etc. as capital goods after 7 July 2009 was also sought to be denied on the ground that these items did not qualify as capital goods or inputs under Rule 2(a) or Rule 2(k) respectively of the Cenvat Credit Rules (CCR). It was further alleged that the Appellant had cleared capital goods as waste and scrap valued at Rs. 39,33,111 without payment of an amount of equal to Central Excise duty aggregating Rs. 4,05,110/- under Rule 3(5A) of the CCR. The demand comprised in all the 4 allegations was confirmed by the Adjudicating Authority vide Order-in- Original dated 29 January 2018. With respect to the First and Second issue, the Adjudicating Authority observed that credit on capital goods and input services used in the CPP....
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.... • CCE Vs. Solaris Chemtech Ltd. reported in 2007 (214) ELT 481 SC (Para 8); • Gularia Chini Mils Vs. Union of India reported in 2014 (34) STR 175 (All.) That Rule 6 had no applicability to non-excisable goods also stood clarified vide Circular dt. 23 December 2013 and that the insertion of the explanation was only prospective in nature is also supported by Circular No. 1027 dt. 25 April 2016 and the decision of the Tribunal in CCE Vs. Palriwal Hydrocarbons & Chemical Pvt. Ltd. reported in 2019 (4) TMI 1335. Second Issue - Cenvat credit on input services used in the Captive Power Plant • Cenvat credit of input services pertains to the common input services covered by Rule 6(5) of the CCR having an overriding effect over Rule 6(1) to Rule 6(3) of the CCR. Such services were used in relation to the entire activity of the Appellant and could not be co-related with any particular revenue stream, while inviting out attention to CBEC Circular Nos. 137/203/2007 dt. 1 October 2007 and 868/6/2008-CX dt. 9 May 2008. • Services covered by Rule 6(5) of the CCR could not be said to have been exclusively used in the manufacture of....
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....merged out of manufacturing activities undertaken by the Appellant, the demand confirmed under Rule 3(5A) of the CCR cannot sustain. Reference in this regard has been invited to the decision of the Tribunal in the case of CCE Vs. UP State Sugar Corporation reported in 2012 (279) ELT 76. Finally, it has been argued that the demand comprised in all the above issues is also hit by the normal period of limitation. 5. The learned Authorized Representative appearing on behalf of the Respondent Revenue supports the Order-in-Original and reiterates the findings of the Learned Adjudicating Authority. 6. Heard both sides and perused the appeal records. 7. We find that the following 4 issues arise for our consideration in the present appeal. (a) Whether Cenvat credit of Rs. 3,09,46,548/- availed by the Appellant on capital goods used in the CPP for production of electricity is admissible to them in terms of the CCR. (b) Whether Cenvat credit of Rs. 7,12,624/- is available on the 17 specified services covered by Rule 6(5) of the CCR used in the generation of electricity within their CPP. (c) Whether Cenvat credit of Rs. 33,32,155/- availed on iron a....
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....deal with the other alternate contentions advanced by the Appellant on this aspect. 9. With respect to the second issue, we find that it is not in dispute that the services with reference to which credit has been taken by the Appellant are covered by Rule 6(5) of the CCR set out below: "(5) Notwithstanding anything contained in sub-rules (1), (2) and (3), credit of the whole of service tax paid on taxable service as specified in sub-clauses (g), (p), (q), (r), (v), (w), (za), (zm), (zp), (zy), (zzd), (zzg), (zzh), (zzi), (zzk), (zzq) and (zzr) of clause (105) of section 65 of the Finance Act shall be allowed unless such service is used exclusively in or in relation to the manufacture of exempted goods or providing exempted services." The Board at para 2 of its Circular dated 1 October 2017 has clarified that the purpose of identifying the 17 specified services for special dispensation is these services are similar in nature to capital goods, that cannot be apportioned for maintaining separate records. Since these input services were undisputedly used in the manufacture of electricity further used, inter alia, in the manufacture of dutiable goods within the factory pr....