Supreme Court of India
COMMISSIONER OF CENTRAL EXCISEversusM/S. GUJARAT NARMADA VALLEY FERTILIZERS CO. LTD.
- Citation
- 2009 INSC 1046
- Decided
- 17 August 2009
- Disposal
- Appeal(s) allowed
- Bench
- S H KAPADIA
Holding
The Court held that sub‑rule (1) of Rule 6 of the CENVAT Credit Rules, 2002 is plenary and disallows CENVAT credit on fuel such as LSHS used in the manufacture of exempted goods, while credit on electricity is permissible only to the extent it is used captive within the factory.
Summary
The Commissioner of Central Excise appealed against Gujarat Narmada Valley Fertilizers Ltd. for disallowing CENVAT credit on Low Sulphur Heavy Stock (LSHS) used as fuel in producing steam and electricity that was employed in the manufacture of exempted fertilizers. The key question was whether Rule 6(1) of the CENVAT Credit Rules, 2002 bars credit on such fuel inputs and whether credit must be reversed for electricity that was wheeled out to the grid or township. The Court held that sub‑rule (1) of Rule 6 is plenary, restating the principle that CENVAT credit is not allowable on any inputs, including fuel, used in the manufacture of exempted goods. Consequently, the credit on LSHS must be reversed. However, credit on electricity is permissible only to the extent it is used captive within the factory; electricity sold to the grid or township does not attract credit. The appeals filed by the Department were allowed, and the matters were remitted to the Adjudicating Authority to determine the exact duty payable without penalty.
Issues considered
- Whether CENVAT credit must be reversed under Rule 6(1) of the CENVAT Credit Rules, 2002 for LSHS used as fuel in the manufacture of exempted fertilizers.
- Whether CENVAT credit must be reversed to the extent of electricity wheeled out/cleared to the grid or township.
Legislation cited
- Central Excise Rules, 1944s. Rule 57AD, s. Rule 6
- CENVAT Credit Rules, 2002s. Rule 6(1), s. Rule 6(2), s. Rule 6(3)
Subjects
CENVAT creditRule 6(1)fuel inputexempted goodselectricity generationcaptive powerLow Sulphur Heavy Stockfertilizer exemptionseparate accountscentral excise
Judgment
[2009] 13 (ADDL.) S.C.R. 286
A COMMISSIONER OF CENTRAL EXCISE i
v.
M/S. GUJARAT NARMADA VALLEY FERTILIZERS CO.
LTD.
(Civil Appeal No. 1308 of 2008)
B AUGUST 17, 2009
[S.H. KAPADIA AND AFTAB ALAM, JJ.]
Cenvat Credit Rules, 2002:
c
r.6(1) - LSHS used as "fuel" for producing steam and
electricity, which in turn is used in or- in relation to the
manufacture of exempted goods - Entitlement to Cenvat credit
on such quantity of fuel - Held: Not entitled.
D
r.6(1) - Electricity wheeled out/cleared to the grid and to
the township - Entitlement to Cenvat credit - Held: Assessee
is entitled to credit on the eligible inputs utilized in the
generation of electricity to the extent the produced electricity
E is used within its factory - Cenvat credit is not available to the
extent of the electricity cleared to the grid or township or in
favour of joint venture, vendors etc. which is sold at a price.
The questions which arose for consideration in
appeals filed by department were whether the assessee
F was required to reverse the CENVAT credit in terms of
Rule 6(1) of Cenvat Credit Rules, 2002 on the quantity of
LSHS which was used as "fuel" for producing steam and
electricity which in turn was used in or in relation to the
manufacture of exempted goods, namely, fertilizers; and
G whether department was right in reversing proportionate
CENVAT credit to the extent of electricity wheeled out/
cleared to the grid and to the township.
H 286
COMMNR. OF CENTRAL EXCISE v. GUJARAT 287
NARMADA VALLEY FERTILIZERS CO. LTD.
Allowing the appeals, the Court A
HELD: 1. Sub-rule (1) of Ru1le 6 of Cenvat Credit
Rules, 2002 is plenary. It restates a principle, namely, that
CENVAT credit for duty paid on inputs used in the
manufacture of exempted final products is not allowable. 8
This principle is in-built in the very structure of the
CENVAT scheme. Sub-rule (1 ), therefore, merely
highlights that principle. Sub~rule (1) covers all inputs,
including fuel, whereas sub-rule (2) refers to non-fuel-
inputs. Sub-rule (2) covers a situation where common c
cenvatted inputs are used in or in relation to manufacture
of dutiable final product and exempted final product but
the fuel-input is excluded from that sub-rule. However,
exclusion of fuel-input vis-a-vis non-fuel-input would still
fall in sub-rule (1 ). As sub-rule (1) is plenary, hence, it o
cannot be said that because sub-rule (2) is inapplicable
to fuel-input(s), CENVAT credit is automatically available
to such inputs even if they are used in the manufacture
of exempted goods. The cumulative reading of sub-rules
(1) and (2) makes it abundantly clear that the E
circumstances specified in sub-rule (2), which requires
separate accounting of inputs, are not applicable to the
fuel-input(s). However, the said sub-rule (2) nowhere says
that the legal effect of sub-rule (1) will stand terminated
in respect of fuel-inputs which do not fall in sub-rule (2). F
In other words, the legal effect of sub-rule (1) has to be
applied to all inputs including fuel-inputs, only exception
being non-fuel-inputs, for which one has to maintain
separate accounts or in its absence pay 8% /10% of the
total price of the exempted final products. Therefore, sub- G
rule (1) shall apply in respect of goods used as "fuel" and
on such application, the credit will not be permissible on
such quantity of fuel which is used in the manufa~ture
of exempted goods. [Para 10) [298-D-H; 299-A-B]
H
288 SUPREME COURT REPORTS [2009] 13 (ADDL.) S.C.R.
A Commissioner of Central Excise and Customs vs. Mis.
Gujarat Narmada Valley (2006) 193 ELT 136, referred to.
2. Assessee is entitled to credit on the eligible inputs
utilized in the generation of electricity to the extent to
8 which they are using the produced electricity within their
factory (for captive production). They are not entitled to
CENVAT credit to the extent of the electricity cleared 'at
the contractual rate in favour of joint venture, vendors etc.
which is sold at a price. [Para 12] (299-F-G]
c Mis. Maruti Suzuki Ltd. v. Commissioner of Central
Excise, Delhi-Ill 2009(11) SCALE 446, relied on.
3. It may be noted that litigation on interpretation of
CENVAT Credit Rules has arisen on account of various
· D conflicting decisions given by the various Benches of
CESTAT, the reason being that the Rules were not
properly drafted. In the circumstances, in this batch of
cases no penalty is leviable, however, in order to decide
the amount of duty payable by each of the assessees, the
E matters are remitted to the Adjudicating Authority to
decide the amount of duty payable without penalty on
reversal of credit to the extent of the input being used in
the manufacture of exempted final products/to the extent
of the excess electricity being wheeled out to the Grid and
F to the Township. [Para 13] (299-H; 300-A-B]
Case Law Reference:
(2006) 193 ELT 136 referred to Para 10
G 2009(11) SCALE 446 relied on Para 12
CIVIL APPELLATE JURISDICTION : Civil Appeal No.
1308 of 2008
H
COMMNR. OF CENTRAL EXCISE v. GUJARAT 289
NARMADA VALLEY FERTILIZERS CO. LTD.
t From the Judgment & Order dated 27.12.2006 of the A
Custom, Excise & Service Tax Appellate Tribursil West Zonal
Bench at Mumbai (LB) in Appeal Nos. E/2517 and 3672/2004.
WITH
B
C.A. No. 1862 of 2006, C.A. No. 4169 of 2008 & C.A. No. 5553
of 2009.
,>..
Gourab Banerjee, ASG, S.K. Bagaria, T.V. Ratnam,
Rupesh Kumar, B. Krishna Prasad, Anil Katiyar, B.V. Balaram
Das, V. Lakshmi Kumaran, Alok Yadav, M.P. Devanath, Mcnish c
Panda, Meenakshi Arora, Mohit D. Ram for the appearing
parties.
The Judgment of the Court was delivered by
D
S. H. KAPADIA, J. 1. Leave granted.
2. The short question which arises for determination in this
batch of civil appeals is: whether the assessee(s) was required
to reverse the CENVAT credit in terms of Rule 6(1) of Cenvat
E
Credit Rules, 2002 on the quantity of LSHS which was used
as "fuel" for producing steam and electricity, which, in turn, was
used in or in relation to the manufacture of exempted goods,
namely, fertilizers, during the disputed period(s).
3. For the sake of convenience we may refer to the facts F
in Civil Appeal No.1308 of 2008 - Commnr. of Central Excise
v. Mis. Gujarat Narmada Fertilisers Co. Ltd.
FACTS
G
4. The assessee is a manufacturer of excisable goods
}
. such as fertilizers, methanol, formic acid, nitric acid, aceptic
acid, etc. out of which fertilizers were exempt from central
excise duty under Notification No.6/2000-CE, dated 1.3.2002.
H
290 SUPREME COURT REPORTS [2009] 13 (ADDL.) S.C.R.
A The respondent functioned under CENVAT Credit Rules, 2002
("2002 Rules", for short) during the relevant period. There is no
dispute that the entire quantity of Low Sulphur Heavy Stock
(LS.HS) was used as "fuel" within the respondent's factory for
burning in the boiler plant for producing steam. There is no
B dispute that the entire steam was used within the factory directly
in or in relation to manufacture of final products or for production
of efectricity which was captively used in the manufacture of final
products. The cre:dit, however, was disallowed due to
interpretation of Rule 6 of the 2002 Rules by the Commissioner
C who took the view that s.ince fertilizers were exempted goods,
credit on LSHS, even though used as "fuel" within the factory,
was not allowable. Accordingly, one show cause notice was
issued on 8.3.04 seeking to disallow CENVAT credit of
Rs.2,17,61,795/- for the period March 2003 to September
D 2003. Vide Order dated 13. 7.04, the said show cause notice
stood confirmed by the Commissioner. The second show
cause notice dated 28.7.04 was issued for a different period,
namely, October 2003 to March 2004 which was also confirmed
by the Commissioner who disallowed CENVAT credit vide his
E Order dated 30.8.04. Against the Commissioners' Orders,
dated 13.7.04 and 30.8.04, disallowing the said CENVAT
credit, the respondent preferred appeals before CESTAT. The
said appeals were referred to a larger Bench who by the
impugned decision dated 27.12.06 held that credit was
F admissible on LSHS used as "fuel". In passing the said Order
the CESTAT followed the judgment of the Gujarat High Court
in the case of Commnr. of Central Excise and Customs v. Ml
s. Gujarat Narmada Valley reported in (2006) 193 ELT 136,
o
in which it was held that in sub-rule (2) of Rule of the 2002
G Rules an exception stood carved out in case of inputs "intended
to be used as fuel" and in such cases the necessity of
maintenance of a separate account or denial of credit cannot
be insisted upon.
H
COMMNR. OF CENTRAL EXCISE v. GUJARAT NARMADA291
VALLEY FERTILIZERS CO. LTD. [S.H. KAPADIA, J.]
RELEVANT RULES A
5. We hereinbelow reproduce relevant rules of the Central
Excise Rules, 1944 and CENVAT Credit Rules, 2002 which
read as follow:
B
"The Central Excise Rules, 1944
,, (as it stood on 29.8.2000)
"AA.· SREDIT OF DUTY PAID ON EXCISABLE GOODS
USED AS INPUTS OR CAPITAL GOODS c
RULE 57AD. Obligation of manufacturer of dutiable and
exempted goods.- (1) CENVAT credit shall not be allowed
on such quantity of inputs which is used in the manufacture
-~
of exempted goods, except in the circumstances
D
mentioned in sub-rule (2).
(2)Where a manufacturer avails of CENVAT credit in
respect of any inputs, except inputs intended to be used
as fuel, and manufactures such final products which are
chargeable to duty as well as exempted goods, then, the E
manufacturer shall maintain separate accounts for receipt,
consumption and inventory of inputs meant for use in the
manufacture of dutiable final products and the quantity of
inputs meant for use in the manufacture of exempted
F
goods and take CENVAT credit only on that quantity of
inputs which is intended for use in the manufacture of
dutiable goods. The manufacturer, opting not to maintain
separate accounts shall follow either of the following
conditions, as applicable to him, namely:-
G
> (a) if the exempted goods are,-
(i) final products falling under Chapters 50 to 63 of the
Schedule to the Central Excise Tariff Act, 1985 ;
H
...
292 SUPREME COURT REPORTS [2009] 13 (ADDL.) S.C.R.
A (ii) tyres of a kind used on animal drawn vehicles or
handcarts and their tubes, falling within Chapter 40;
(iii) black and white television sets, falling within Chapter
85;
B
(iv) newsprint, in rolls or sheets, falling within Chapter
~eading No.48.01,
_.,\,,.
the manufacturer shall pay an amount equivalent to the
CENVAT credit attributable to inputs used in or in relation
c to the manufacture of such final products at the time of their
clearance from the factory, or
(b) if the exempted goods are other than those described
in clause (a) above, the manufacturer shall pay an amount
~-
D equal to eight per cent. of the total price, excluding sales
tax and other taxes, if any, paid on such goods, of the
exempted final product charged by the manufacturer for the
sale of such goods at the time of their clearance from the
factory.
E
Explanation.- The amount mentioned in (a) and (b) above
shall be paid by the manufacturer by debiting the CENVAT
credit or otherwise.
(3) No credit of the specified duty shall be allowed on
F
capital goods which are used exclusively in the
manufacture of exempted goods (other than final products
which are exempt from the whole of the duty of excise
leviable thereon under any notification where exemption is
granted based upon the value or quantity of clearances
G
made in a financial year).
(4) The provisions of sub- rule (1), sub-rule (2) and sub-
rule (3) shall not be applicable in case the exempted goods
H
COMMNR. OF CENTRAL EXCISE v. GUJARAT NARMADA 293
VALLEY FERTILIZERS CO. LTD. [S.H. KAPADIA, J.]
are either,- A
(i) cleared to a unit in a free trade zone; or
(ii) cleared to a hundred per cent. Export-oriented
undertaking; or
8
(iii) cleared to a unit in an Electronic Hardware Technology
Park or Software Technology Parks; or
(iv) _supplied to the United Nations or an international
organization for their official use or supplied to projects c
funded by them, on which exemption of duty is available
under notification of the Government of India in the Ministry
of Finance (Department of Revenue) No.108/95-Central
-~
Excises, dated 28th August, 1995; or
D
(v) cleared for export under bond in terms of the provisions
of rule 13."
CENVAT Credit Rules, 2002
RULE 6. Obligation of manufacturer of dutiable and E
exempted goods.-
1. The CENVAT credit shall not be allowed on such
quantity of inputs which is used in the manufacture
of exempted goods, except in the circumstances F
mentioned in sub-rule (2).
Provided the CENVAT credit on inputs shall not be
denied to job worker referred to in rule 128 of the
Central Excise Rules, 2002 on the ground that the
G
said inputs are used in the manufacture of goods
)-.
cleared without payment of duty under the
provisions of that rule.
2. Where a manufacturer avails of CENVAT credit in
H
294 SUPREME COURT REPORTS (2009] 13 (ADDL.) S.C.R.
A respect of any inputs, except inputs intended to be -1
used as fuel, and manufactures such final products
which are chargeable to duty as well as exempted
goods, then, the manufacturer. shall maint~,:n
separate accounts for receipt, consumption and
B inventory of inputs meant for use in the manufacture
of dutiable final products and the quantity of inputs
meant for use in the manufacture of exempted
goods and take CENVAT credit only on that quantity
of inputs which is intended for use in the
"
c manufacture of dutiable goods.
3. The manufacturer, opting not to maintain separate
accounts shall follow either of the following
conditions, as applicable to him, namely:- >-
D
a. if the exempted goods are-
i. goods falling within heading No. 22.04 of the
First Schedule to the Tariff Act;
E ii. Low Sulphur Heavy Stock (LSHS) falling
within Chapter 27-of the said First Schedule
used in the generation of electricity;
iii. Naphtha (RN) falling within Chapter 27 of the
F said First Schedule used in the manufacture
of fertilizer;
iv. Omitted.
v. newsprint, in rolls or sheets, falling
,'
within
G heading No.48.01 of the said First Schedule;
~-
vi. final products falling within Chapter~ 50 to 63
of the said First Schedule,
vii. Naptha (RN) and furnace oil falling within
H
COMMNR. OF CENTRAL EXCISE v. GUJARAT NARMADA 295
VALLEY FERTILIZERS CO. LTD. [S.H. KAPADIA, J.]
Chapter 27 of the said First Schedule used A
for generation of electricity;
viii. Goods supplied to defence personnel or for
defence projects or to the Ministry of
Defence for official purposes, under any of B
the following notifications of the Government
of India in the erstwhile Ministry of Finance
(Department of Revenue), namely:-
(1) No. 70/92-Central Excise, dated the 17th
June, 1992, G.S.R.595 (E), dated the 17th
c
June, 1992;
(2) No.62/95-Central Excise, dated the 16th
March, 1995, G.S.R.254 (E), dated the 16th
March, 1995; D
(3) No.63/95-Central Excise, dated the 16th
March, 1995, G.S.R.255 (E), dated the 16th
March, 1995;
E
(4) No.64/95-Central Excise, dated the 16th
March, 1995, G.S.R.256(E), dated the 16th
March, 1995;
_+
the manufacturer shall pay an amount equivalent to the
CENVAT credit attributable to inputs used in, or in relation F
to, the manufacture of such final products at the time of
their clearance from the factory; or
b. if the exempted goods are other than those
described in condition (a), the manufacturer shall G
pay an amount equal to.-efght per cent. of the total
price, excluding sales tax and other taxes, if any,
paid on such goods, of the exempted final product
charged by the manufacturer for the sale of such
H
296 SUPREME COURT REPORTS [2009] 13 (ADDL.) $.C.R. •
,,....
A goods at 'the time of their clearance from the
factory.
-+
Explanation 1.- The amount mentioned in conditions
(a) and (b) shall be paid by tile manufacturer by
B debiting the CENVAT credit or otherwise.
Explanation II.- If the manufacturer fails to pay the
said amount, it shall be recovered along with
interest in the same manner, as provided in rule 12,
for recovery of CENVAT credit wrongly taken. "
c
6. It may be noted that sub-rules (1) and (2) of Rule 57AD
of the Central Excise Rules, 1944 is pari materia with sub-rules '-
(1) and (2) of Rule 6 of the CENVAT Credit Rules, 2002.
D SUBMISSIONS
7. According to Shri Gourab Banerji, learned Addi.
Solicitor General appearing for the Department, Rule 57AD(1)/
Rule 6(1) is a general bar that CENVAT credit is r;iot admissible
E on such quantity of inputs which are used in the manufacture
of exempted goods. According to learned counsel, this bar is
consistent with the basic idea of CENVAT scheme. Learned
counsel submitted that on a bare reading of sub-rule (2) of Rule
6 of the 2002 Rules, it is clear that the said sub-rule imposes ~-
F an obligation on the manufacturer when he is manufacturing
dutiable and exempted goods to either maintain separate
accounts qua inputs on dutiable and exempted goods or if he
does not choose to do so he has to pay certain specified
amount. In the alternative, learned counsel submitted that since
G LSHS was used for generation of electricity or steam it did not
fall in the category of "inputs used as fuel" and consequently
the assessee herein was required to maintain separate account ,.{_ I
or pay a certain specified amount under sub-rules (2) and (3)
of Rule 6 of the 2002 Rules.
H
COMMNR. OF CENTRAL EXCISE v. GUJARAT NARMADA297
VALLEY FERTILIZERS CO. LTD. [S.H. KAPADIA, J.]
8. Shri S.K. Bagaria, learned senior counsel appearing on A
"""f
behalf of the assessee(s}, submitted that inputs "intended to be
used as fuel" have been specifically excluded from the
obligations under Rule 6 of the CENVAT Credit Rules, 2002.
According to learned counsel, inputs "intended to be used as
fuel" have been specifically excluded from the requirement of B
sub-rule (2) by using the expression "except inputs intended to
be used as fuel" and consequently the obligation of maintaining
t separate accounts and taking credit only on inputs intended for
use in the manufacture of dutiable goods is not applicable in
respect of inputs "intended to be used as fuel". According to c
learned counsel, under sub-rule (3) of Rule 6, a manufacturer
opting not to maintain separate accounts has to follow either
of the two conditions mentioned in clauses (a) and_(b}of sub-
rule (3) of Rule 6. Clause (a) applies to specified exempted
goods whereas clause (b) applif;lS to exempted goods other D
than those mentioned in clause (a). In respect of exempted
goods covered by clause (b), the manufacturer shall pay an
amount equal to 8%/10%, as the case may be, of the total price,
excluding taxes, if any, charged by the manufacturer for sale of
such goods. Therefore, according to learned counsel, sub-rule E
(3) makes it clear that it applies only to cases where a
manufacturer is required to maintain separate accounts under
sub-rule (2) but opted not to do so and since in the present
case LSHS is used as "fuel", sub-rule (2), which carves out an
exception to goods used as "fuel", is not applicable, and F
therefore the assessee(s) was not required to maintain
separate accounts. In other words, according to learned
counsel, inputs "intended to be used as fuel" have been
specifically excluded from the obligation of maintaining
separate accounts under sub-rule (2) and, therefore, in respect G
~ of these inputs there is no question of opting or not opting to
'- maintain separate accounts under sub-rule (2) and
consequently the present case cannot be covered by sub-rule
(3) which applies only to a manufacturer opting not to maintain
H
298 SUPREME COURT REPORTS [2009] 13 (ADDL.) S.C.R.
A separate account(s). -y
FINDINGS
9. As can be seen from the submissions, the contention
·of the assessee is that exclusion of fuel-inputs from the purview
B
of sub-rule (2) of Rule 6 would mean that such inputs are also
automatically excluded from sub-rule (1) whereas according to
the Department sub-rule (1) is a general rule which provides, A._
that except for the circumstances mentioned in sub-rule (2),
CENVAT credit sh~ll not be allowed on such quantity of inputs
IC used in the manufacture of exempted goods and even though
fuel-inputs are excluded from sub-rule (2), such inputs would still
fall under sub-rule (1).
10. In our view, sub-rule (1) is plenary. It restates a
D principle, namely, that CENVAT cred)t for duty paid on inputs
used in the manufacture of exempted final products is not
allowable. This principle is in-built in the very structure of the
CENVAT scheme. Sub-rule (1), therefore, merely highlights that
principle. Sub-rule (1) covers all inputs, including fuel, whereas ...
E sub-rule (2) refers to non-fuel-inputs. Sub-rule (2) covers a
situation where common cenvatted inputs are used in or in
relation to manufacture of dutiable final product and exempted
final product but the fuel-input-is excluded from that sub-rule. --t
However, exclusion of fuel-input vis-a-vis non-fuel-input would
F still fall in sub-rule (1). As stated above, sub-rule (1) is plenary,
hence, it cannot be said that because sub-rule (2) is
inapplicable to fuel-input(s), CENVAT credit is automatically
available to such inputs even.if they are used in the manufacture
of exempted goods. The cumulative reading of sub-rules (1) and
G
(2) makes it abundantly clear that the circumstances specified
in sub-rule (2), which inter alia requires separate accounting
of inputs, are not applicable to the fuel-input(s). However, the ""· A
said sub-rule (2) nowhere says that the legal effect of sub-rule
( 1) will stand terminated in respect of fuel-inputs which do not
H
COMMNR. OF CENTRAL EXCISE v. GUJARAT NARMADA 299
VALLEY FERTILIZERS CO. LTD. [S.H. KAPADIA, J.]
fall in sub-rule (2). In other words, the legal effect of sub-rule A
(1) has to be applied to all inputs including fuel-inputs, only
exception being non-fuel-inputs, for which one has to maintain
separate accounts or in its absence pay 8% /10% of the total
price of the exempted final products. Therefore, sub-rule (1)
shall apply in respect of goods used as "fuel" and on such B
application, the credit will not be permissible on such quantity
of fuel which is used in the manufacture of exempted goods. In
our view, the above aspect has not been properly appreciated
by the Gujarat High Court in the above case of Mis. Gujarat
Narmada Valley reported in (2006) 193 ELT 136 (supra). C
11. For the above reasons, we find merit in the
Department's civil appeals.
12. Before concluding, one point needs to be noted. In this D
batch of cases there is a civil appeal bearing Civil Appeal
No.1862 of 2006 - CCEC, Vadodara v. Mis. Gujarat
Narmada Yalley which concerns the period November 2000
to February 2001. In that matter, apart from interpretation of
Rule 6(1) and Rule 6(2), the question which arises for E
determination is : whether the Department was right in reversing
proportionate CENVAT credit to the extent of electricity
wheeled out/cleared to the Grid and to the Township. Therefore,
on the question of interpretation of Rule 6(1) and Rule 6(2), the
above reasoning squarely covers the case. On the question of F
reversal of CENVAT credit, to the extent of the electricity
wheeled out/cleared to the Grid and to the Township, our
Judgment delivered today in the case of Mis. Maruti Suzuki
Ltd. v. Commissioner of Central Excise, Delhi-Ill [Civil Appeal
No. of 2009 -(arising out of S.L.P. (C) No.3826 of 2009)1, would G
~ apply.
13. It may be noted that litigation on interpretation of
CENVAT Credit Rules has arisen on account of various
conflicting decisions given by the various Benches of CESTAT, H
300 SUPREME COURT REPORTS [2009] 13 (ADDL.) S.C.R.
A the reason being that the Rules have not been properly drafted.
In the circumstances, we are of the view that in this batch of
cases no penalty is leviable, however, in order to decide the
amount of duty payable by each of the assessees, the matters
are rer:nitted to the Adjudicating Authority to decide the amount
B of duty payable without penalty on reversal of credit to the extent
of ~he input being used in the manufacture c;>f exempted final
products/to the extent of the excess electricity being wheeled
out to the Grid and to the Township.
c 14. Subject to what is stated above, the civil appeals filed
by the Department are allowed with no order as to costs.
D.G. Appeals allowed.
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