Mann & Hummel Filter Pvt. Ltd vs Commissioner Of Central Excise, ...

[Arising out of Order-In-Appeal No. 68/2009 dated 14/07/2009 passed by the Commissioner of Central Excise, Bangalore]

For approval and signature:

HON'BLE SHRI B.S.V. MURTHY, TECHNICAL MEMBER

1 Whether Press Reporters may be allowed to see the Order for publication as per Rule 27 of the CESTAT (Procedure) Rules, 1982? No 2 Whether it should be released under Rule 27 of the CESTAT (Procedure) Rules, 1982 for publication in any authoritative report or not? No 3 Whether Their Lordships wish to see the fair copy of the Order? Seen 4 Whether Order is to be circulated to the Departmental authorities? Yes

Mann & Hummel Filter Pvt. Ltd. No. 27, 28 & 29, A Block, Antharasana Halli Industrial Area, II Phase, Antharasana Halli, Tumkur Appellant(s)

Versus Commissioner of Central Excise, Service Tax And Customs Bangalore-II PB 5400 CR Building, Queens Road, Bangalore  560 001 Karnataka Respondent(s)

Appearance:

Mr. Rajesh Kumar, CA Hiregange & Associates #1010, 1st Floor (Above Corp. Bank) 26th Main, 4th T Block, Jayanagar, Bangalore  560 041 Karnataka For the Appellant

Mr. N. Jagdish, AR For the Respondent

Date of Hearing: 23/01/2015 Date of Decision: 23/01/2015 CORAM:

HON'BLE SHRI B.S.V. MURTHY, TECHNICAL MEMBER

Final Order No. 20141 / 2015

Per: B.S.V. MURTHY

The entire cenvat credit of Rs. 9,94,214/- (Rupees Nine Lakhs Ninety Four Thousand Two Hundred and Fourteen only) availed on the Diesel Generating Sets and Air Compressor by the appellant in the year 2006 has been disallowed and demanded with interest and penalty equal to the amount of credit availed has been imposed. It has been denied on the ground that the appellant has sold a portion of the electricity produced by the DG set to another unit. It is the stand of the department that credit can be allowed only when exclusively used by the appellant for their own purpose and because the electricity generated has been sold by the appellant credit is not admissible.

2. After hearing both the sides, I find that Rule 6(4) of Cenvat Credit Rules is the relevant Rule which reads as under:

(4) No CENVAT credit shall be allowed on capital goods which are used exclusively in the manufacture of exempted goods or in providing exempted services. It can be seen that cenvat credit can be disallowed only when capital goods are used exclusively in the manufacture of exempted goods or in providing exempted services. That being the position, when there is no dispute that the appellants have not used DG set exclusively for manufacture of electricity which is in turn used for manufacture of exempted goods, credit could not have been denied. Electricity is in any case exempted but nevertheless the capital goods which are used for producing electricity which is in turn used for manufacture of duty paid goods in any case is eligible as per law. That being the position, just because appellants have sold a portion of electricity generated to others, credit cannot be denied unless it is shown that electricity generated has been used only in the manufacture of exempted goods. In the result, appeal has to be allowed and is allowed with consequential relief, if any, to the appellant.

(Order pronounced and dictated in open court)

(B.S.V. MURTHY) TECHNICAL MEMBER

iss