TaxTMI 
TaxTMI 
2019 (12) TMI 1016
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....facture of their final product. Show Cause Notice dated 25.07.2017 was issued for disallowance of Cenvat Credit amounting to Rs. 5,97,610/- and recovery of the same. The adjudicating authority disallowed the Cenvat Credit and ordered for recovery of the same along with applicable interest. He however chose to impose a penalty @ 25% of the Cenvat Credit so disallowed under Rule 15(1) of the Cenvat Credit Rules, 2004 read with Section 11AC (1)(b) of Central Excise Act, 1944. On appeal the learned Commissioner(Appeals) upheld the denial of Cenvat Credit, but held that in absence of any mala fide intention, the penalty is not imposable and accordingly set aside the penalty imposed @ 25% under section 11AC. Being aggrieved, the appellant assesse....
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....in-Appeal No.54/HAL/CE/2017-18 dated 16.11.2017 has discussed the entire issue in details and finally concluded that the appellant assessee had rightly availed Cenvat Credit on Furnace Oil used in the generation of electricity in a captive power generating machine, even though a part of such generated electricity is used in factory office, workers' canteen etc.. Para 6 of the order-in-appeal dated 16.11.2017 is reproduced for appreciation of facts and issue in dispute. "6. I find that the moot issue in the instant appeal is whether CENVAT credit is allowable on Furnace Oil used in the generation of electricity in a captive power generating machine where a part of such generated electricity is used in factory office, worker's cantee....
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.... include cement, angles, channels, Centrally Twisted Deform bar (CTD) or Thermo Mechanically Treatred bar (TMT) and other items used for construction of factory shed, building or laying of foundation or making of structures for support of capital goods; Rule 2(k) of CENVAT Credit Rules, 2004 - Definition of 'input' - w.e.f. 01.04.2011. "input" means- (i) all goods used in the factory by the manufacturer of the final product; or (ii) any goods including accessories, cleared along with the final product, the value of which is included in the value of the final product and goods used for providing free warranty for final products; or (iii) all goods used for generation of electricity or steam for ca....
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....ny part of which any manufacturing process connected with the production of these goods is being carried on or is ordinarily carried on; From the study of the above quoted rules and section s of the said Rules and Act it is quite evident that in terms of the definition of 'input' as was prior to 01.04.2011, input includes goods used for generation of electricity used in or in relation to manufacture of final products or for any other purpose, within the factory of production. Hence, as was prior to 01.04.2011, input, inter alia includes, goods satisfying the following conditions- i) the goods may be used for generation of electricity, and ii) electricity so generated shall be used in or in relation to manufacture of fin....
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.... [2004 (167) E.L.T. 434 (Tri.-Chennai)] held that Nitrogen used for chilling water and if a portion of that chilled water was used for administrative purposes, such portion of nitrogen should not suffer duty. However, with effect from 01.04.2011, with the abolition of the phrase "used in or in relation to manufacture of final products" from the definition of 'input' vide Notification No.3/2011-CE(Nt) dated 01.03.2011, the scope of input has not only been more widened, it has also become more inclusive. With effect from 01.04.2011, 'input' inter alia, includes all goods used for generation of electricity for captive use. The Institute of Cost and Works Accountants of India (a Statutory Body under an Act of Parliament) in their Guidance No....