TaxTMI 
TaxTMI 
2020 (1) TMI 529
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....tory to use such waste / tail gas to generate electricity. Electricity so generated is captively used in further manufacturing process within the factory and only a part of the same is sold to the Grid. Proceedings were initiated and SCN dated 31.08.2016 was issued for raising demand of central excise duty calculated @ 6% on the value of electricity sold, by invoking the provisions of Rule 6(3) of the CENVAT Credit Rules, 2004, on the ground that electricity is 'exempted goods' and that the appellant did not reverse the proportionate CENVAT credit availed on inputs and input service. In the course of adjudication, the Ld. Commissioner after following the due process of law confirmed the demand proposed in the SCN. The appellant is before us against the adjudication Order dated 25.06.2019. 3. Sri Rajeev Agarwal, C.A., appeared for the appellant and Sri S.S.Chattopadhyay, Ld.D.R. appeared for the Revenue. 4. The Ld. C.A. appearing on behalf of the appellant made a detailed arguments in support of this contentions which are as below: (i) He vehemently argued that the very SCN (in Para 2.2) has been issued on a wrong set of facts that 'coal gas' (instead of waste gas / tail gas) ....
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....mpted goods' as defined in the Credit Rules has been amended vide Notf. 6/2015-CE(NT), w.e.f. 1st March 2015 to include "non-excisable goods". Therefore, no credit is liable to be reversed for the period prior to March 2015. In their case, the proportionate credit has already been reversed for the period 2015-16 covering the normal period of limitation which is the fact on record and not in dispute. (iv) He relied on the decision of the Tribunal in the case of Jai Balaji Industries Ltd vs. CCE, Raipur [2017 (352) ELT 86 (Tri-Del)] wherein it has been held that there is no justification to demand an amount calculated @ 5% / 10% of the sale value of electricity when the assessee has already reversed the proportionate credit attributable to sale of electricity even though the procedure prescribed in Rule 6(3) of the Credit Rules has not been followed by the assessee (i.e. intimation to the department to exercise the option for reversal of credit has not been made). (v) Contesting the demand on limitation, he submitted that the production process undertaken by appellant for manufacture of carbon black was well within the knowledge of the department. The appellant has always been su....
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....in the Credit Rules. He accordingly submitted that the impugned order passed by the Ld. Commissioner is legal and does not warrant any interference. He prayed that the appeal be rejected being devoid of any merit. 6. Heard both sides and perused the appeal records. 7. The issue to be decided in this case is whether appellant is liable to pay the amount calculated @ 6% of the sale value of electricity sold outside the factory when admittedly the appellant has reversed the proportionate credit of inputs and input services attributable to sale of electricity. Before we deal with the main issue whether the appellant is liable to pay the amount as per Rule 6(3) of the Credit Rules, it is important to decide whether the electricity generated from waste gas / tail gas is classifiable under chapter heading 2716 00 00 and whether the same can be said to be 'exempted goods'. 8. We have perused the decision of the Hon'ble Allahabad High Court as relied upon by the appellant in the case of Gularia Chini Mills vs. UOI [2014 (34) STR 175 (All)] in which case, the electricity was generated from bagasse which is a waste product. It has been held by the Hon'ble High Court to be not classifiab....
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....hat the very SCN was issued on the wrong footing that coal gas is used for generation of electricity, which has not been dealt by the Ld. Commissioner in his impugned order. The Hon'ble Allahabad High Court has categorically observed that Chapter 27 of the Central Excise Tariff does not cover electrical energy produced by solar power, hydro power, wind power or from bagasse i.e. waste, we are of the considered view that waste / tail gas used in generation of electricity also cannot be said to be classifiable under chapter 27 and therefore, since the same is not excisable, the question of being exempt also does not arise. 9. We take note of the specific amendment made in the definition of the term 'exempted goods' under the Credit Rules vide Notf. 6/2015-CE(NT), w.e.f. 1st March, 2015, to include non excisable goods. Therefore, for the purpose of reversal of CENVAT credit, non excisable goods would be considered to be exempted goods and the assessee will be liable to reverse the proportionate credit w.e.f. 1st March, 2015 onwards and not for the prior period. In so far as the finding made by the Ld. Commissioner in para 4.25 of the impugned adjudication order since the appellant....
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....ined. The Hon'ble High Court while rejecting the Revenue's contention observed as follows:- "5. The learned counsel for the appellant-revenue argued that there was absolutely no foundation for CESTAT to have stated in paragraph 4 of the impugned order that it is an admitted fact that the respondent had calculated and debited the credits attributable to the electricity sold by it and that such debit was made before issuance of the notice by the original authority. It was also argued that no separate accounts having been maintained and therefore it was impermissible for the respondent to claim any credit for the quantity of electricity sold out to other units. As noticed hereinbefore, the original authority and the first appellate authority had pointedly considered and discussed the quantification of the electricity which was sold out from the respondent's Establishment. This is demonstrated by the specific reference made by us hereinabove to paragraph 8 of the first appellate authority's order and para 6 of the original authority's order. With such finding of fact having been rendered by the first appellate authority, there is no dispute as to the quantum of electricity which was....
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....y disclosures are made in the audited financial statements for submission with the various statutory bodies. We find that the Tribunal in the case of Compark E Services Pvt Ltd vs. CCE [2019 (24) GSTL 634 (Tri-All)] has observed that when the assessee is subject to compliance and monitoring with other statutory bodies and the transactions have been disclosed in the financial statements, it cannot be said that there was any suppression. The interpretation that since the return has not been filed or tax has not been paid would be only for reasons of fraud or suppression will render the provisions relating to limitation otiose and infructuous. The relevant observation made by Tribunal is reproduced below:- "12. A reading of the order of the Original Adjudicating Authority as also of the Appellate Authority lead me to observe that the extended period of limitation stands invoked by both the authorities by simply observing that they had deliberately and with an intention not paid the duty and have suppressed the value. Apart from this simple observation made by both the Authorities, neither of them have referred to any evidences on record to show that such non-payment of Service Tax ....