Bengal Energy Ltd. Vs Commr. of CGST & Central Excise (CESTAT Kolkata)
Material Facts
The assessee manufactures hard coke of coal (coke) using coking coal as the principal input. During the manufacturing process, coking coal is heated in coke ovens, resulting in the inevitable generation of hot flue gas (waste gas) as a by-product. Instead of allowing the waste gas to dissipate, the assessee uses it in an integrated power plant to generate electricity, which is partly consumed captively and partly sold to the West Bengal State Electricity Distribution Company Ltd.
During an excise audit, the Department observed that the assessee manufactured dutiable goods (coke) as well as exempted goods (electricity) without maintaining separate accounts for receipt, consumption and inventory of coking coal. It alleged that the assessee was liable to pay an amount equivalent to 6% of the value of electricity under Rule 6(3)(i) of the CENVAT Credit Rules, 2004.
Show cause notices were issued covering:
- April 2011 to February 2016, demanding Rs.11,60,62,456.
- March 2016 to December 2016, demanding Rs.2,01,62,182.
- March 2016 to June 2017, demanding Rs.1,07,37,188.
The adjudicating authority dropped the entire first demand and part of the second demand but confirmed Rs.1,51,73,411. Subsequently, the Commissioner (Appeals) set aside the demand raised under the third show cause notice.
