COMMISSIONER OF C. EX. Vs. DCW LTD.

JUDGEMENT

(1.) IN these appeals filed by the department, the short question arising for consideration is whether the respondents were entitled, during the relevant periods, to take full Modvat credit of duty paid on fuels [Low Sulphur Heavy Stock (LSHS) and Furnace Oil (FO)] used in the generation of electricity which was captivity consumed in the manufacturing process. The period of dispute in Appeal No. 700/2004 is July, 1996 to October, 1997. In the remaining appeal, the period of dispute is April, 1998 to 10 -9 -1998. Learned Commissioner (Appeals) allowed the credit to the respondents in terms of Rule 57B of the Central Excise Rules, 1944. The department is aggrieved by this decision and hence these appeals. According to the appellant, the respondents could avail credit on the above fuels only to the extent of 10% of the duty paid thereon, in terms of Notification No. 14/97 -C.E. (N.T.) dated 3 -5 -1997 which amended Notification No. 5/94 -C.E. (N.T.) restricting the permissible Modvat credit to 10%. It is also pointed out in these appeals that Section 87 of the Finance Act, 1997 gave retrospective effect to Notification No. 14/97 -C.E. (N.T.) ibid. The appellant's grievance is that these provisions were not considered by the lower appellate authority. The respondents, represented by Senior Counsel, would contest the above case of the Revenue by submitting that the issue stands settled in their favour by the Supreme Court's judgment in Jindal Poly Films Ltd. v. Commissioner of Central Excise, Meerut 2006 (198) E.L.T 3 (S.C.). It is also submitted that, from 2 -6 -1998, they did not take credit in excess of 95% of the duty paid on the fuels.

(2.) AFTER a perusal of the Apex Court's judgment, we find that, during the period up to 1 -6 -1998, the respondents were entitled to avail full credit of the duty paid on LSHS and FO used in the generation of electricity, in terms of Rule 57B of the Central Excise Rules, 1944. For the period from 2 -6 -1998, the respondents could avail such credit only to the extent of 95% in terms of Rule 57B(1) as amended under Notification No. 21/98 -C.E. (N.T.), dated 2 -6 -1998. This restriction is also found to have been laid down in the judgment of the Apex Court.

(3.) IN the result, both the appeals are dismissed.