M/S. Hindustan Zinc Ltd vs C.C.E. & S.T. Jaipur-Ii
- CitationAppeal No. E/1007/2012-EX(SM)
Ratio decidendi
The rule this decision rests on
Cenvat credit on inputs is not available in respect of the portion of electricity generated in a captive power plant that is sold to a third party (here, a state electricity distribution company); the credit attributable to such electricity must be reversed. Cenvat credit on inputs used to generate electricity that is transferred to a sister unit for use in manufacturing a final product remains available, following the Tribunal's earlier decision in the appellant's own case. Where the clearance of electricity to a third party was discovered in the course of investigation and was not disclosed to the department, the assessee is liable to penalty for the wrongly availed credit.
Written by Miss Lucy from the judgment below, not taken from a headnote.
Judgment
As delivered
[Arising out of Order-in-Appeal No. 01(AKJ)/CE/JPR-II/2012 dated 12.01.2012 by the Commissioner of Central Excise (Appeals), Jaipur-II].
For approval and signature:
Honble Mr Ashok Jindal, Member (Judicial)
1 Whether Press Reporters may be allowed to see the Order for publication as per Rule 27 of the CESTAT (Procedure) Rules, 1982?
2 Whether it should be released under Rule 27 of the CESTAT (Procedure) Rules, 1982 for publication in any authoritative report or not?
3 Whether Their Lordships wish to see the fair copy of the Order?
4 Whether Order is to be circulated to the Departmental authorities?
M/s. Hindustan Zinc Ltd. .Appellants
Vs.
C.C.E. & S.T. Jaipur-II .Respondent
Appearance:
Shri H. Bajaj, Advocate for the Appellants
Shri A.K. Dhawan, DR for the Respondent
CORAM:
Hon'ble Shri Ashok Jindal, Member (Judicial)
Date of Hearing: 02.01.2015
FINAL ORDER NO.50016/2015-EX-(SM)
Per Ashok Jindal:
The appellant is in appeal against the impugned order wherein Cenvat Credit on inputs used in generation of electricity in captive power plant of the appellant was denied by the lower authorities on the premise that some of the electricity was sold to M/s. Ajmer Vidyut Vitran Nigam Ltd. and some electricity was cleared to their sister unit.
2. Heard the parties.
3. Considering the fact that the electricity which was cleared by M/s. Ajmer Vidyut Vitran Nigam Ltd. the appellant is not entitled to take Cenvat Credit on inputs which are attributable to the electricity sold to M/s. Ajmer Vidyut Vitran Nigam Ltd. Therefore, appellants are required to reverse the amount of inputs used in generation of electricity sold to M/s. Ajmer Vidyut Vitran Nigam Ltd. Further, I find that the electricity which was transferred to their sister unit for manufacturing of final product, the appellant is entitled to take Cenvat Credit as held by this Tribunal in their own case by Final order no.A/54457/2014-SM(BR) dated 07.11.2014. As the fact of clearance of electricity to M/s. Ajmer Vidyut Vitran Nigam Ltd. came to the knowledge during the course of investigation otherwise the appellant would not have reversed the said credit and the same fact has not been brought in the knowledge of the department. Therefore, appellant is liable to be penalised on that account.
4. In these terms, I impose a penalty of Rs.4000 on the appellant.
5. In result, the denial of Cenvat Credit on inputs attributable to electricity cleared to M/s. Ajmer Vidyut Vitran Nigam Ltd. and a penalty of Rs.4000/- is confirmed.
6. With these terms appeal is disposed off.
(Dictated and pronounced in the open court)
(Ashok Jindal) Member (Judicial)
Bhanu
3
E/1007/2012-EX(SM)
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