COMMISSIONER OF CENTRAL EXCISE Vs. RAVI INDUSTRIES

JUDGEMENT

(1.) This appeal is filed by the Revenue.

(2.) Shri V. Valte, learned SDR appearing for the Revenue pleaded that the respondents are manufacturing forged products and they have claimed Modvat credit on LDO as inputs in the manufacture of final products. The period involved in this case is from April, 1994 to December, 1994 and the amount of Modvat credit involved is Rs. 34,525/ -. The Original Authority has allowed the Modvat credit on LDO under Rule 57A of the Central Excise Rules. On appeal, the Commissioner (Appeals) upheld the order of the original authority. Now the department has come in appeal before the Tribunal on the ground that the LDO is capable of producing electricity and it can be used as an alternative source of power. It was only by an amendment vide Notification No. 11/95 -C.E. (N.T.), dated 16 -3 -1995 that Rule 57A for the first time provided that input used for generation of electricity used within the factory of production for manufacture of final products or for any other purpose would be modvatable. The inclusion of the inputs used as fuel in explanation under Rule 57A was made under Notification No. 4/94 -C.E. (N.T.), dated 1 -3 -1994. It is pleaded by the Revenue that the electricity is not fuel and during the relevant period, the respondents were not eligible for credit; and the decision of Ballarpur Industries v. CCE, Belgaum - 2000 (116) E.L.T. 312 is not applicable.

(3.) Shri Ram Kumar Agarwal, learned Advocate appearing for the respondents pleaded that they are using LDO as fuel in their burner as iron sheets and rods are made red hot with the help of heat generated by the burner using LDO as fuel and these red hot iron steel and rods are hammered to produce forgings. Therefore, LDO was being used as fuel from March, 1999 and they were eligible for Modvat credit for the same under Notification No. 4/94 -C.E. (N.T.), dated 1 -3 -1994.