Jayaswal Neco Industries Limited Vs Principal Commissioner (CESTAT Delhi)
The appeals before the Tribunal were filed by both the assessee and the Revenue against the same adjudication order. The assessee is engaged in the manufacture of sponge iron, pig iron, and billets, using iron ore and coal/coke as inputs. It availed Cenvat credit on inputs and input services such as goods transport agency services, cargo handling services, security services, repair and maintenance services, and manpower recruitment services used in manufacturing. The assessee also operated five captive power plants within its factory premises for generating electricity used in the manufacture of dutiable finished goods. A portion of duty-paid coal, along with coal fines and coal rejects, was used in certain power plants for electricity generation. Since electricity could not be stored, surplus electricity was sold to the Chhattisgarh State Electricity Board.
During an audit covering the period January 2009 to March 2015, it was observed that the assessee was not maintaining separate accounts of inputs and input services used for manufacturing dutiable goods and exempted goods, namely electricity sold outside the factory. The Department took the view that, under Rule 6(3)(i) of the Cenvat Credit Rules, 2004, the assessee was required to pay an amount equivalent to a specified percentage of the value of electricity sold outside the factory. Accordingly, four show cause notices were issued.
