Per T.K. Jayaraman : This appeal has been filed against the OIO No. 26/2005-Commr. dated 08.09.2005 passed by the Commissioner of Central Excise, Belgaum.

2. The appellant M/s. Gokak Mills Limited is a division of M/s. Forbes Gokak Ltd. They manufacture excisable goods. M/s. Forbes Gokak Ltd. is a 100% EOU. The appellant availed cenvat credit on the amount paid on purchase of power from M/s. Forbes Gokak Ltd. for the period from May 2004 to November 2004. M/s. Forbes Gokak Ltd. sold excess power generated by them to the appellant and, therefore, the appellant paid an amount equal to the duty leviable viz. Rs. 61,38,256/- on the raw materials and consumables, but for exemption thereon, used for generation of each unit of power sold in Domestic Tariff Area in terms of Notification Nos. 52/2003-Cus. dated 31.03.2003 and 22/2003-CE dated 31.03.2003. According to Revenue the credit taken is irregular. The original authority denied the credit taken and demanded the amount along with interest under Rule 12 of the erstwhile Cenvat Credit Rules, 2002 and Rule 14 of the Cenvat Credit Rules, 2004. Being aggrieved over the impugned order, the appellants have come before this Tribunal for relief.

3. Shri K.S. Ravi Shankar, the learned Advocate appeared for the appellants and Shri K. Sambi Reddy, the learned JDR, for the Revenue.

4. The learned Advocate urged the following points:-

(i) The appellant relies on the definition of the expression "duty" in Section 2A of the Act, which has been totally ignored by the learned Respondent, and the definition is inclusive and has a wide connotation. What has been paid in an amount equal to duty, is nothing but duty, which is also supported by the Supreme Court decision in CC, Rajkot Vs. Sarabhai International Ltd. - 2000 (119) ELT 6 (SC). The impugned order is untenable in law.

(ii) That if it is the case of the Department that an amount equal to duty is not duty - there is no provision in the Cenvat Credit Rules, 2002 and 2004 to deny credit or demand amounts which are admittedly not duty. Reliance is placed on Pushpaman Forgings - 2003 (58) RLT F4 (SC)=2003 (153) ELT A89 (SC), Wheel Axle Plant Vs. CCE - 2003 (58) RLT 878 (CESTAT-Ban.)=2003 (161) ELT 843 (T), Indian Railways Vs. CCE - 2005 (67) RLT 198 (CESTAT-Ban.)=2004 (116) ECR 733 (T) and Krishna Industrial Corporation Vs. CCE - 2005 (186) ELT 318 (T).

(iii) That there ought to be a "sale" as per the wordings of the Notification and the Appellant being one unit of the very same Company transferred the electrical energy to another unit of the self-same company and therefore, there was no "sale" and the provisions of the notifications cannot be invoked to allege that there was sale. The appellant is relying on a letter of the Government of Karnataka dated 26.05.2004, wherein it has been stated that the DTA unit and the Electricity generation plant are in the same premises and no permission was necessary. The appellant has further enclosed the Registration Certificates issued by various authorities of the Government of India which have registered both the Appellants unit as one legal entity.

(iv) That an "amount equal to duty" paid while transferring power by the EOU to the DTA unit, on which the credit has been availed, is nothing but "duty foregone at the time of procurement on duty-free material" since that material was used to generate power by the EOU and such goods were exempted under Section 25 of the Customs Act and Section 5A of the Central Excise Act. What was exempted was "duty" and what was collected when power was transferred from the EOU was such foregone duty on inputs. Therefore, the question of denying credit under Cenvat rules cannot arise.

(v) As per the Circular issued by GOI in MF (DR) Circular of CBEC dt. 31.3.2003 in Circular No. 22/2003-Cus., F.No. 305/25/1997-FTT [reported in 2003 (55) RLT M218], it has been clarified in para-3 that the fact that the sale of such power in DTA is allowed only on payment of duty foregone on co