M/S Maruti Suzuki Ltd vs Commr.Of Central Excise-Iii,Delhi

Explanation 2.- Inputs include goods used in the manufacture of capital goods which are further used in the factory of the manufacturer; RULE 3. CENVAT credit.-

Explanation I.- The amount mentioned in conditions (a) and (b) shall be paid by the manufacturer by debiting the CENVAT credit or otherwise. Explanation II.- If the manufacturer fails to pay the said amount, it shall be recovered along with interest in the same manner, as provided in rule 12, for recovery of CENVAT credit wrongly taken. 4No CENVAT credit shall be allowed on capital goods which are used exclusively in the manufacture of exempted goods, other than the final products which are exempt from the whole of the duty of excise leviable thereon under any 1 7 notification where exemption is granted based upon the value or quantity of clearances made in a financial year.

(1) A manufacturer or producer of final products or a provider of taxable service shall be allowed to take credit (hereinafter referred to as the CENVAT credit) of -

(3) Notwithstanding anything contained in sub-rule (1), in relation to a service which ceases to be an exempted service, the provider of the output service shall be allowed to take CENVAT credit of the duty paid on the inputs received on and after the 10th day of September, 2004 and lying in stock on the date on which any service ceases to be an exempted service and used for providing such service.

(e) service tax on any output service:

(i), (ii) and (iii) above;

Explanation II.- If the manufacturer or provider of output service fails to pay the said amount, it shall be recovered along with interest in the same manner, as provided in rule 14, for recovery of CENVAT credit wrongly taken.

(4) No CENVAT credit shall be allowed on capital goods which are used exclusively in the manufacture of exempted goods or in providing exempted services, other than the final products which are exempt from the whole of the duty of excise leviable thereon under any notification where exemption is granted based upon the value or quantity of clearances made in a financial year.

(ii) cleared to a hundred per cent. export-oriented undertaking; or

(emphasis supplied by us) 2 5 Finding:

15. Coming to the analysis of the inclusive part of the definition one finds that it covers:

17. As stated, the definition is in three parts, namely, specific part, inclusive part and place of use. All the three parts are required to be satisfied before an input becomes an eligible input.

20. To sum up, we hold that the definition of "input" brings within its fold, inputs used for generation of electricity or steam, provided such electricity or steam is used within the factory of 3 5 production for manufacture of final products or for any other purpose. The important point to be noted is that, in the present case, excess electricity has been cleared by the assessee at the agreed rate from time to time in favour of its joint ventures, vendors etc. for a price and has also cleared such electricity in favour of the grid for distribution. To that extent, in our view, assessee was not entitled to CENVAT credit. In short, assessee is entitled to credit on the eligible inputs utilized in the generation of electricity to the extent to which they are using the produced electricity within their factory (for captive consumption). They are not entitled to CENVAT credit to the extent of the excess electricity cleared at the contractual rates in favour of joint ventures, vendors etc., which is sold at a price.

22. For the aforestated reasons, we dismiss Civil Appeal No. of 2009 - (arising out of S.L.P. (C) No.3826 of 2009) - M/s. Maruti Suzuki Ltd. v. Commissioner of Central Excise, Delhi-III and Civil Appeal No._ of 2009 - (Arising out of S.L.P. (C) No.5362 of 2009) with no order as to costs.

August 17, 2009.