ORDER
S.L. Peeran, Member (J)
1. The appeal arises from Order-in-Appeal No. 95/05 CE dated 31.5.2005 by which the demands issued by show cause notice dated 2.1.2004 has been confirmed for the period April 1999 to September 2002. The issue has been linked with the Department rejection of modvat credit indigenously used for purification of water and generation of same for manufacture of electricity. The part of unutilized electricity was diverted to housing colony, therefore the proceedings were initiated to deny the modvat credit on those inputs used in the generation of steam and purification of water for generation of electricity. The Department was aware of the facts of the case and there was no suppression. Therefore, the Tribunal in the previous proceedings against the same party vide Final Order No. 1915/2005 dated 16.11.05 held that the larger period was not invokable and the demands were set aside on time bar, as there was no allegation of suppression of fact. Tribunal relied on its ruling rendered in the case of Rashtriya Ispat Nigam Limited v. CCE .
2. The learned Counsel prays for setting aside the demands on the ground of time bar. He fairly concedes with portion of the demands covered within the limitation period. He submits that the production of excess electricity and clearance of the same to outsiders is required to be considered as waste and the benefit of the modvat cannot be denied. He further submits that this view has been expressed by the Apex Court ruling rendered in the case of Sail 1996 (88) ELT 314 and by the Tribunal ruling rendered in the case of Inalsa Ltd. v. Commissioner reported in 1997 (90) 417. Both the ratio of these cases has been relied on Reliance Industries Limited reported in 2004 (178) ELT 416. He submits that these rulings still apply to the facts of their own case and hence, the part demand is required to be set aside on merits.
3. The learned DR opposes, the prayer and submits that the electricity which has been diverted to the residential colony cannot get the benefit of modvat and hence the rejection of the same by the lower authorities is justified and requires to be upheld.
4. On a careful consideration, I notice that in the assessee’s own case vide Final Order No. 1915/2005 dated 16.11.2005, the demand for the previous period has been set aside on time bar. In the present case also the show cause notice has been issued on 2.1.2004 for the period April 1999 to September 2003. There is no allegation of suppression or mis-representation or mis-declaration of facts. The facts were within the knowledge of the Department, hence the invokation of larger period is not justified and demands for larger period are set aside. So far as the demands within the time limit is concerned, the issue is covered by the noted judgments. Applying the ratio thereof, the availment of the cenvat credit with regard to the items used in the purification of water and generation of steam for production of electricity is required to be extended, even if a portion of electricity is cleared to using housing colony. The Tribunal in the case of Reliance Industries Limited has noted the other judgments cited to hold that the excess electricity cleared is to be treated as waste and the benefit is required to be extended. In that view of the matter, the confirmation of demand is set aside and appeal is allowed with consequential relief, if any.
(Pronounced and dictated in open Court)