2004 (2) TMI 241

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....e engaged in the manufacture of fertilizers, chemicals and PCB and are availing the facility of Modvat/Cenvat credit. They are using LSHS (Low Sulphur Heavy Stock) as feed stock for manufacture of fertilizers. A part of LSHS is also used in the generation of steam and electricity. The steam generated is being used in the manufacture of fertilizer and the industrial products and the balance is bein....

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....001 to June 2001. The demand has been proposed for recovery under Rule 57AH of the Central Excise Rules, 1944 and Rule 8 of the Cenvat Credit Rules, 2001. While the order of the adjudicating authority quotes extensively from the said rules claiming that credit of duty paid on inputs used in the manufacture of exempted final products is deniable, which view is also upheld by the Commissioner (Appea....

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....s permissible as long as the fuel is used in the manufacture of steam which is utilised in the factory. There is no dispute that the steam is not so used. It is, in fact, used for manufacture of fertilizers, chemicals as well as for the generation of electricity. All the three uses having occurred in the factory, it is immaterial as to what happens to the electricity so manufactured from steam. ....