Rule 3(5A) of CCR, 2004 not apply in absence of removal of capital assets

Simbhaoli Sugars Limited Vs Addl. Director General (CESTAT Delhi)

CESTAT Delhi held that provisions of rule 3(5A) of the Cenvat Credit Rules are not attracted when there is no removal of capital assets/ power plant. Hence, Cenvat Credit not leviable.

Facts- The appellant units are engaged in the manufacture of sugar, molasses and distillery products, which are dutiable.

Both the appellant units are equipped with a power plant (co-generation plant) within their factory company unit, electricity is generated by the use of steam and fuel baggage is used. The electricity / electrical energy is covered under CETH 27160000 and is chargeable to a Nil rate of duty.

The appellant availed MODVAT/ CENVAT credit in the past on procurement of inputs (used in the fabrication of capital goods), capital goods/plant and machinery for the purpose of setting up of power plant.

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