TaxTMI 
TaxTMI 
2026 (1) TMI 951
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....24 passed by the Commissioner, Central Excise and Central Goods and Service Tax Commissionerate, Udaipur [the Commissioner] adjudicating six show cause notices. The Commissioner has disallowed CENVAT credit availed by the appellant and, accordingly, confirmed the demand of CENVAT credit with interest under rule 14 of the CENVAT Credit Rules 2004 [the 2004 Credit Rules] read with section 11A and 11AB/11AA of the Central Excise Act, 1944 [the Central Excise Act]. The Commissioner has also imposed penalty upon the appellant under rule 15(1) of the 2004 Credit Rules. However, the demand relating to electricity wheeled out to the sister concerns of the appellant has been dropped. 2. The period involved, the demand of duty, the interest levied....
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.... of the appellant, it was observed by the internal audit wing of the Central Excise Commissionerate, Jaipur-II that the appellant had availed CENVAT credit of duty paid on inputs and input services used in the Captive Power Plant of the appellant for generating power. This power was partly consumed in the factory of the appellant and was also not only partly transferred to the sister concerns of the appellant but was also partly sold to M/s. Ajmer Vidyut Vitran Nigam Limited [the State Electricity Board]. The department objected to the availment of CENVAT credit by the appellant of duty paid on inputs and input services attributable to that portion of electricity that was wheeled out to the sister concerns of the appellant and also sold to ....
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....55 of 2013 decided on 06.04.2017 decided by the Tribunal on 06.04.2017, which decision was upheld by the Rajasthan High Court in DBCA No. 185/2017 dated 10.07.2023 and this decision of the High Court was accepted by department on merits. 8. Six appeals have been filed by the appellant before the Tribunal against the impugned order dated 26.06.2024 to the extent it has confirmed the demand on the electricity sold to the State Electricity Board and imposed penalty. 9. According to the appellant, the CENVAT credit attributable to inputs and input services used in generation of electricity sold to the State Electricity Board was reversed by the appellant on monthly basis at the end of each month and details of reversal of CENVAT credit ha....
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....e exact amount that was reversed by the appellant. The contention, therefore, that has been advanced is that once the appellant had reversed CENVAT credit on inputs and input services attributable to electricity sold to the State Electricity Board, it would tantamount to not taking of credit at all. Learned counsel, therefore, submitted that the impugned order to this extent is liable to be set aside and penalty could not have been imposed under rule 15(1) of the 2004 Credit Rules. In support of this contention learned counsel placed reliance upon the decision of the Tribunal in the own case of the appellant on similar issues in M/s. Hindustan Zinc Ltd. vs. The Commissioner, Central Goods and Service Tax, Udaipur- Excise Appeal No. 50298 of....
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....al Excise & Customs vs. Precot Meridian Ltd- 2015 (325) E.L.T. 234 (S.C.). This issue was also examined at length by the Tribunal in the own case of the appellant in Excise Appeal No. 50298 of 2025 connected with five more excise appeals which were decided on 24.11.2025. 16. The demand raised in the impugned order in respect of inputs and input services attributable to electricity sold to the State Electricity Board, therefore, has to be set aside. 17. Penalty imposed upon the appellant under rule 15(1) of the 2004 Credit Rules read with section 11AC of the Central Excise Act cannot also be imposed because rule 15(1) is applicable only in a situation where the assessee has taken or utilized CENVAT credit in respect of input or input s....