2023 (12) TMI 369

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....2. Briefly the facts of the present case are that the appellant is engaged in the manufacture of Acrylic Fibre, Tow & Tops falling under Chapter 55 of the First Schedule to this Central Excise Tariff Act, 1985. 2.1 The appellant also have a captive power plant for the generation of electricity within their factory which runs on Biomass/Agricultural waste. The electricity generated by the appellant is mainly consumed by them captively for the manufacture of their final products. The surplus electricity is sold to Punjab State Electricity Board (PSEB in short) and is supplied to residential colony for the workers within the factory. 2.2 A show cause notice was issued to the appellant for the period from April, 2006 to February, 2009 whi....

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.... been reversed, no amount over and above this amount merits to be recovered. The appellant also took a plea that the electricity is not an excisable item therefore, Rule 6 is not applicable as this Rule is applicable only in a case where common Inputs/Input Services have been used for the manufacturing of exempted as well as dutiable products. Since electricity is not excisable item, the question of it being exempt or chargeable to nil rate of duty does not arise. The appellant also pleaded that only proportionate credit was required to be reversed as shown in the calculation chart filed along with the reply to Show Cause Notice and also raised the issue of time bar. 2.5 After following due process, the original authority dropped the dem....

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....colony as an input services used for generation of electricity which has been captively consumed. He prayed that the excess amount reversed by them be refunded to them. 4.3 He also raised the issue that the entire demand is hit by bar of limitation as the appellant was under a bonafide belief that since electricity is not an excisable item and the provisions of Rule 6 of Cenvat Credit Rules are not applicable. 5. On the other hand, the Ld. DR reiterated the findings in the impugned order. 6. After considering the submissions of both the parties and perusal of material on record, we find that for the relevant period from April 2006 to February 2009, the department demanded an amount equal to 10% of the electricity sold to PSEB and c....