Whether appellant is eligible to Cenvat credit of duty paid on RPO which is used in the manufacture of LDO to be ultimately used as fuel.

PJ/Case Law /2016-17/3396

Case:-FORMA CHEM PVT. LTD. VersusCOMMISSIONER OF C. EX., KOLKATA-I

Citation:- 2016 (342) E.L.T. 276 (Tri. - Kolkata)

Brief facts:- This appeal has been filed by the appellant against Order-in-Appeal No. 32/Kol-VII/2012, dated 13-4-2012.

Appellant’s contention:-Shri P. Bhattacharyya, authorised representative for the appellant argued that Light Diluted Oil (LDO) is made from Rubber Processing Oil (RPO) and is used captively as fuel. It is the case of the appellant that the fuel used by the appellant is not the restricted category of fuel mentioned in Rule 2(k) of the Cenvat Credit Rules, 2004 and accordingly credit was correctly taken.

Respondent’s contention:- Shri J. Bose, AC (AR) appearing on behalf of the Revenue argued that appellant was using RPO earlier for the manufacture of LDO which was marketed as “Forma Solvent”. That once the same product is marketed as Forma Solvent, the same cannot be used as LDO fuel and is not covered by the definition of inputs under Rule 2(k) of the Cenvat Credit Rules, 2004.

Reasoning of judgement:-Heard both sides and perused the case records. The issue involved in the present proceedings is whether appellant is eligible to Cenvat credit of duty paid on RPO which is used in the manufacture of LDO to be ultimately used as fuel. The appellant is of the view that LDO used as ‘fuel’ is not restricted by the exclusion clauses of Fuels under Rule 2(k) of the Cenvat Credit Rules, 2004. No sample of the product so used as fuel was drawn by the Department to strengthen the argument that fuel was belonging to one of the excluding categories of fuel described under Rule 2(k) of the Cenvat Credit Rules, 2004. In the absence of any such documentary evidence, there is nothing on record to hold that the fuel used by the appellant was not covered within the definition of Rule 2(k) of the Cenvat Credit Rules, 2004. Accordingly, appeal filed by the appellant is allowed with consequential relief, if any.
(Operative part of the order already pronounced in the Court)

Decision:-Appeal allowed

Comment:- The analogy of case is that the appellant is eligible to Cenvat credit of duty paid on RPO which is used in the manufacture of LDO to be ultimately used as fuel , as No sample of the product so used as fuel was drawn by the Department to strengthen the argument that fuel was belonging to one of the excluding categories of fuel described under Rule 2(k) of the Cenvat Credit Rules, 2004.
Therefore due to lack of documentary evidence on the side of department, is nothing on record to hold that the fuel used by the appellant was not covered within the definition of Rule 2(k) of the Cenvat Credit Rules, 2004.

PREPARED BY: RAKSHAY TATER

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PJ/Case Law /2016-17/3396

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