D.C. Mandal, Member (T)

1. Brief facts of the case are that the appellants generated electricity in their own plant and also purchased electricity from D.V.C. The electricity generated by them and also that purchased from D.V.C. got mixed up in a common grid before the same was consumed in the appellants' own plant as well as in the township outside the appellants' generating plant. The appellants did not pay Central Excise duty on the electricity generated by them and claimed that no duty was payable by them on the said electricity under Notification No. 52/78-CE, dated 1.3.1978. Under this Notification, electricity was exempted from Central Excise duty provided it was proved to the satisfaction of the Assistant Collector of Central Excise that such electricity was produced by the generating station, Industrial Unit or an establishment, and is subsequently used in such generating station including Auxiliary Plant, if any. A show cause notice dated 2.1.1982 was issued to the appellants asking them to explain why Central Excise duty on electricity consumed during the period from 1.3.1978 to 31.10.1981, should not be recovered under Rule 9(2) and why penalty should not be imposed