CCE Vs. AGNI STEELS LTD.

JUDGEMENT

(1.) This is revenue's appeal against Order -in -Appeal No. 279/2004 -CE (SLM) dated 9.6.2004 passed by the Commissioner of Central Excise (Appeals), Salem. The respondents received raw materials for manufacture of CTD bars on job work basis under Notification No. 214/86 dated 25.3.1986. They were also manufacturing goods on their own account clearing them on payment of duty. They were using furnace oil for the manufacture of the above mentioned goods. Modvat credit taken on the fuel oil was denied by the lower authority on the ground that they were using inputs both for exempted goods and dutiable goods. Under these circumstances they were not entitled to the credit when no separate account of inputs used for exempted and dutiable goods is mentioned. The respondents went in appeal to the Commissioner (Appeals) who decided the issue in favour of the respondents by relying on the case law decided by the Tribunal in the case of Dalmia Magnesite Corporation v. CCE Coimbatore. The revenue has come before this Tribunal against the impugned order on the ground that the Commissioner (Appeals) has wrongly relied on the case law in the case of Dalmia Magnesite Corporation. According to the revenue the facts in that case and the present case are distinguishable. In the Dalmia Magnesite Corporation, DBM, the product in question is an intermediary product manufactured on their own used and cleared on their own account. In the instant case, the product is manufactured on job work basis and the product is the final product.

(2.) Shri B.L. Meena, SDR appeared on the behalf of the revenue -appellant and Shri M.V. Raman, Adv. For the respondents.

(3.) I have gone through the records of the case carefully. In CENVAT Credit Rules 2002 under Rule 6(2) fuel is specifically excluded. In other words, when inputs are used for dutiable and exempted final products separate account of the input has to be maintained. But as far as fuel is concerned, there is a specific exclusion in the rule itself. This exclusion was available in the erstwhile Rules 57C(3) and 57CC(1) of the Central Excise Rules 1944. The following case laws clearly bring out the legal position: