COMMISSIONER OF CENTRAL EXCISE, BANGALORE Vs. BIOCON LTD.

JUDGEMENT

(1.) REVENUE is in appeal against the decision of the Commissioner (Appeals) who allowed proportionate cenvat credit availed in respect of furnace oil used in production of steam/power supplied to EOU belonging to the same company.

(2.) LD . DR on behalf of the Revenue submitted that the Commissioner in his order has allowed proportionate credit to the respondents on the ground that in respect of supplies of excisable goods made to 100% EOU no credit is required to be reversed as per the provisions of Rule 6(6) of Cenvat Credit Rules, 2004. She relies upon the decision of the Honble Supreme Court in the case of Vikram Cement v. CCE, Indore [2006 (194) E.L.T. 3 (S.C.)] and Maruti Suzuki Ltd. v. CCE, Delhi -III [2009 (240) E.L.T. 641 (S.C.)] to submit that credit can be taken and utilized only when the inputs are used within the factory for manufacture. Once a portion of the electricity generated by using fuel oil is sent out to a 100% EOU, the condition that the input should have been used within the factory of production is not fulfilled and credit is not admissible. When the credit is not admissible, the question of application of Rule 6(6) of CCR does not arise.

(3.) HOWEVER , ld. Advocate for the respondent submitted that the issue as to whether a number of different plants manufacturing different excisable goods in the same premises would constitute one factory and the separate registration would not mean that they are different factories had come up before the Apex Court in the case of Dhampur Sugar Mills Ltd. v. CCE [2007 (216) E.L.T. A23 (S.C.)] when the Apex Court considered the civil appeal filed by the Revenue against the decision of the Tribunal in the case of Dhampur Sugar Mills Ltd. v. CCE [2001 (129) E.L.T. 73 (Tri.)]. In this case, 100% EOU to whom the electricity generated was supplied is located within the same compound and therefore in view of decision in the case of Dhampur Sugar Mills Ltd., the credit is admissible. Further he drew my attention to the provisions of Rule 6(6) of CCR which clearly show that the provisions of sub -rules 1, 2, 3 and 4 of Rule 6 would not apply when excisable goods are supplied to a 100% EOU.