Commissioner of Central Excise Vs Finolex Industries Ltd. (CESTAT Mumbai)
The appeals filed by the Revenue challenged Order-in-Original No. 14/CEX/COMMR/KOP/2012 dated 30.03.2012 passed by the Commissioner of Central Excise, Kolhapur, whereby proceedings arising from the show cause notice dated 15.06.2011 were dropped. Finolex Industries Ltd. was engaged in the manufacture of PVC resin, PVC pipes and pipe fittings and had established a captive power plant (CPP) to secure uninterrupted power supply. The respondents had availed CENVAT credit on capital goods used for setting up, erecting and commissioning the CPP during the period 2006-07 to 2010-11 up to December 2010.
Revenue disputed the credit principally on the ground that electricity generated in the CPP was an exempted/non-excisable product and that, from December 2009 to 02.05.2011, the electricity generated was sold to Maharashtra State Electricity Distribution Co. Ltd. (MSEDCL) through Maharashtra State Electricity Transmission Co. Ltd. (MSETCL), rather than being used in the manufacture of dutiable PVC products. The show cause notice alleged wrongful availment of CENVAT credit of Rs. 17,06,34,666/- under Rule 6(4) of the CENVAT Credit Rules, 2004, besides proposing interest, penalty and confiscation. By a subsequent corrigendum, personal penalties were also proposed against the respondents in Appeal Nos. E/1215/2012 and E/1216/2012.
