JUDGMENT K.S. Jhaveri, J. - By way of this appeal, the appellant has challenged the judgment and order of the Tribunal whereby the Tribunal has allowed the appeal of the assessee. 2. This Court while admitting the appeal on 4-12-2017 framed following substantial question of law : "Whether the Ld. CESTAT was right in law in holding that the assessee was entitled to avail the full credit of Excise Duty/Service Tax paid on input/input services under in their captive power plant when all the power generated through the captive power plant was not used by them for the manufacture of finished goods but part of the power generated was also supplied/wheeled out to the other plants?" 3. Counsel for appellant has taken us to the definition of "input". Rule 2(k) reads as under : "Rule 2............... (k) "input" means - (i) all goods used in the factory by the manufacturer of the final product; or (ii) any goods including accessories, cleared along with the final product, the value of which is included in the value of the final product and goods used for providing free warranty for final product; or (iii) all goods used for generation of electricity or steam for captive use; or (iv) all goods used for providing any output service; but excludes - (A) light diesel oil, high speed diesel oil or motor spirit, commonly known as petrol; (B) any goods used for - (a) construction of a building or a civil structure or a part thereof; or (b) laying of foundation or making of structures for support of capital goods, except for the provision of any taxable service specified in sub-clauses (zn), (zzl), (zzm), (zzq), (zzzh) and (zzzza) of clause (105) of section 65 of the Finance Act; (C) capital goods except when used as parts or components in the manufacture of a final product; (D) motor vehicles; (E) any goods, such as food items, goods used in a guesthouse, residential colony, club or a recreation facility and clinical establishment, when such goods are used primarily for personal use or consumption of any employee; and (F) any goods which have no relationship whatsoever with the manufacture of a final product. Explanation. Explanation. - For the purpose of this clause, "free warranty" means a warranty provided by the manufacturer, the value of which is included in the price of the final product and is not charged separately from the customer; 4. He has also taken us to Rule 2(l), wherein input services, reads as under : "Rule 2......................... Explanation. - For the purpose of this clause, "free warranty" means a warranty provided by the manufacturer, the value of which is included in the price of the final product and is not charged separately from the customer; 4. He has also taken us to Rule 2(l), wherein input services, reads as under : "Rule 2......................... (l) "input service" means any service, - (i) used by a provider of taxable service for providing an output service; or (ii) used by the manufacturer, whether directly or indirectly, in or in relation to the manufacture of final products and clearance of final products up to the place of removal, and includes services used in relation to modernization, renovation or repairs of a factory, premises of provider of output service or an office relating to such factory or premises, advertisement or sales promotion, market research, storage up to the place of removal, procurement of inputs, accounting, auditing, financing, recruitment and quality control, coaching and training, computer networking, credit rating, share registry, security, business exhibition, legal services, inward transportation of inputs or capital goods and outward transportation up to the place of removal; but excludes services, - (A) specified in sub-clauses (p), (zn), (zzn), (zzm), (zzq), (zzzh) and (zzzza) of clause (105) of Section 65 of the Finance Act (hereinafter referred as specified services), in so far as they are used for - (a) construction of a building or a civil structure or a part thereof; or (b) laying of foundation or making of structures for support of capital goods, except for the provision of one or more of the specified services; or (B) specified in sub-clauses (o) and (zzzzj) of clause (105) of section 65 of the Finance Act, in so far as they relate to a motor vehicle which is not a capital goods; or (BA) specified in sub-clauses (d) and (zo) of clause (105) of section 65 of the Finance Act, except when used by - (a) a manufacturer of a motor vehicle in respect of a motor vehicle manufactured by him; or (b) a provider of output service as specified in sub-clause (d) of clause (105) of Section 65 of the Finance Act, in respect of a motor vehicle insured or reinsured by him; or (C) such as those provided in relation to outdoor catering, beauty treatment, health services, cosmetic and plastic surgery, membership of a club, health and fitness centre, life insurance, health insurance and travel benefits extended to employees on vacation such as Leave or Home Travel Concession, when such services are used primarily for personal use or consumption of any employee;" and contended that in view of the specific averments which are made by counsel for the appellant, the Tribunal has relied upon the decisions. However, the appellant preferred the appeal on the following grounds : "E. Because the Ld. CESTAT failed to appreciate that thus from the above decisions of the Hon'ble Apex Court, which have been passed in relation to use of inputs and are equally applicable in the context of input and input services too, it is apparent that the assessee respondent is not entitled to CENVAT credit of the input services which have been used in the Captive Power Plant for generation of electricity to the extent of the portion of electricity not used in the manufacture of goods within their factory and cleared or wheeled out to their other units/sister concerns whether for a consideration or not. F. Because the Ld. CESTAT failed to appreciate that the sister units of the assessee respondent cannot be treated as one and the same. In this regard the Hon'ble Supreme Court while dealing with the issue of eligibility to exemption in the case of Rollatainers Ltd. vs. CCE, Delhi has laid the following law : "7. There is no two opinion that both the factories are near to each other and it is owned by the same owner and the common balance sheet is maintained. But, by this can it be said that both the factories are one and the same? The definition of the "factory as defined in Section 20(e) of the Central Excise Act, 1944, reads as under : "(e) "factory" means any premises, including the precincts thereof, wherein or in any part of which excisable goods other than salt are manufactured, or wherein or in any part of which any manufacturing process connected with the production of these goods is being carried on or is ordinarily carried on;" 8. Simply because both the factories are in the same premises that does not lead to the inference that both the factories are one and the same. In the present case, from the facts it is apparent that there is no commonality of the purpose, both the factories have a separate entrance, there is a passage in between and they are not complimentary to each nor they are subsidiary to each other. The end-product is also different, one manufactures duplex board and the other manufactures paper. They are separately registered with the Central Excise Department. The staff is separate, their management is separate. The end-product is also different, one manufactures duplex board and the other manufactures paper. They are separately registered with the Central Excise Department. The staff is separate, their management is separate. It is also not the case of Revenue that end-product of one factory is raw material for the other factory. From the above facts it is apparent that there is no commonality between the two factories, both are separate establishments run by separate Managers though at the apex level it is maintained by the appellant-company. There are separate staff, separate finished goods. Simply because both the factories may have common boundaries that will not make it one factory. Accordingly, we are of the opinion that the view taken by the Tribunal does not appear to be well-founded and likewise, the view taken by the Commissioner, Central Excise. Accordingly, we allow both these appeals, set aside the order of the Tribunal passed on June 7, 2002 as well as the order passed by the Commissioner, Central Excise, New Delhi-Ill on September 28, 2001 in both the appeals. No order as to costs." G. Because the Ld. CESTAT failed to appreciate that it is settled proposition of law that the sister units of the assessee-respondent having different registration are distinct entities and cannot be treated as one and the same and therefore under the Central Excise provisions the assessee-respondent was not entitled to take Cenvat credit in respect of those input and input services which were not used in or in relation to the manufacture of final products in their own factory. H. Because the Ld. CESTAT grossly erred in permitting full Cenvat credit on input and input services used in Captive Power Plant for generation of electricity (even though the entire electricity generated has not been used captively in the factory of the assessee-respondent in or in relation to manufacture of their dutiable final products but a portion of the electricity so generated has been cleared to sister units) is legally incorrect as the provisions permit only captive consumption and the other plants are separate entities from the existing assessee-respondent and have to follow their own regulations. Further, there was no nexus between the process and use of the electricity in manufacture of final products at the unit of the assessee-respondent to the extent the electricity was wheeled out/transferred to other sister units. Further, there was no nexus between the process and use of the electricity in manufacture of final products at the unit of the assessee-respondent to the extent the electricity was wheeled out/transferred to other sister units. I. Because the Final Order No. A/939/2012-SM(BR), dated 10-7-2012 of the Ld. CESTAT in case of Hindustan Zinc Ltd. has been accepted on monetary limit and not on merit. J. Because the Final Order No. A/51895-51899/2016-EX (DB), dated 16-11-2016 of the Ld. CESTAT in case of Hindustan Zinc Ltd. has been accepted on monetary limit and not on merit. K. Because the Final Order No. 52132-52133/2017-EX(DB), dated 2-3-2017 of the Ld. CESTAT in case of Hindustan Zinc Ltd. has not been accepted by the Department on merits and is being appealed against. L. Because the Final Order No. 53340-53343/2017-EX(DB), dated 7-4-2017 of the Ld. CESTAT in case of Shree Cement Limited, Ajmer has not been accepted by the Department on merits and is being appealed against. 5. Counsel for appellant has contended that the observations made by the Tribunal are as under :- "Here, the excess electricity has been cleared by the appellant at the agreed rate in favour of their sister concern units and have also cleared such electricity in favour of the grid for distribution. Therefore, the appellant are not entitled to take Cenvat credit to the extent of excess electricity transferred to the sister concern units at the contractual rates. 5(iii). Obviously, the electricity generation required for carrying out the manufacturing activity, the electricity also forms part of the manufacturing activity and the input as well as "input services" used/utilized in the generation of electricity are the input or input service used/utilized in the manufacture of final product. However, to the extent the excess electricity is transferred to other (i.e. sister concern) units outside the factory of production the nexus between the process and permitted use gets disconnected. In such a case, it cannot be said that electricity generated in used in or in relation to the manufacture of final product within the factory of production. However, to the extent the excess electricity is transferred to other (i.e. sister concern) units outside the factory of production the nexus between the process and permitted use gets disconnected. In such a case, it cannot be said that electricity generated in used in or in relation to the manufacture of final product within the factory of production. Therefore, to the extent of Cenvat attributable to the inputs/input services used/utilized in the production of excess electricity wheeled out to other units would not be admissible for Cenvat credit as 'input and input services' used in such wheeled out electricity would not fall within the definition of Rule (k) and Rule (l) of the Cenvat Credit Rules, 2004 as enumerated in the foregoing para. 6. From the above it is clear that Cenvat credit is only available to such input/inputs services which is used in the generation of that quantum of electricity which has been used captively in the production of final product and the input/input services which has been used in the generation of electricity which has been wheeled out to the sister concern units of the appellant is not considered as the input and input services in terms of definitions given herein above. Hence, credit taken on that quantity of electricity which has been wheeled out to the sister concern units is not admissible to the appellant. The ratio of the case laws cited by the appellant cannot be applied in these cases." 6. He has also contended that the Tribunal in paras 3 to 5 has seriously committed error in allowing the appeal, which reads as under : "3. The Ld. Counsel submits that the Cenvat credit in respect of inputs and input services used in the power generated in CPP and transferred to sister concerns is admissible to the assessee as the input and input services were ultimately used in the manufacture of dutiable final products either by the assessee or by their sister concerns. He also submits that the issue is already decided by the Tribunal in favour of the assessee in the case of Hindustan Zinc Ltd. vs. CCE, Jaipur-II vide final order Nos. A/52132-33/2017-EX(DB), dated 2-3-2017 and other cases. The assessee already has a decision in their favour from the Single Member Bench in the case of Shree Cement Ltd. vs. Commissioner vide Final Order No. A/52280/2016-SM(BR), dated 30-6-2016. 4. The Ld. A/52132-33/2017-EX(DB), dated 2-3-2017 and other cases. The assessee already has a decision in their favour from the Single Member Bench in the case of Shree Cement Ltd. vs. Commissioner vide Final Order No. A/52280/2016-SM(BR), dated 30-6-2016. 4. The Ld. DR submits that the issue may be decided in favour of the Revenue. 5. On careful consideration of the submissions made by both sides and perusal of records, we find that the issue is regarding reversal of Cenvat credit attributable to the power generated but transferred to their sister concerns. It is the case of the Revenue that the inputs and input services are not used in respect of power which is generated and captively consumed. We find no merits in the arguments put forth by the adjudicating authority in denying the Cenvat credit to the appellant as in an identical issue, in respect of very same assessee, but situated at Chittorgarh, Rajasthan, this Bench vide Final Order Nos. A51898-51899/2016 held as under : "Heard both the sides and examined the appeal records. The short point for decision is whether or not the appellant is eligible to avail the credit on input services used in the generation of electricity which is partly cleared to their sister units who are also engaged in the manufacture of dutiable final products. The admitted fact is that the Cenvat credit on input services used in the generation of power is eligible to the appellant as long as the electricity is used in the manufacture of dutiable final product. The only dispute is relating to the usage of electricity captively within the plant of generation and also outside the generation unit by the same manufacturer. Considering that the electricity has been used in the manufacture of dutiable final products and also the fact that all units belong to the appellant the denial of credit is not justifiable in the present case. Further, it is a fact that if the appellant were to follow the procedure for input service distribution the credit eligibility on part of the electricity cleared to sister unit could not have been questioned and the credit could have been passed on to the unit which is actually using the electricity or retained fully by the appellant himself without proportionate distribution. Such being the factual position, I find that the impugned orders are not sustainable. Such being the factual position, I find that the impugned orders are not sustainable. Further, the reliance placed in the impugned order on the ratio of Hon'ble Supreme Court in Maruti Suzuki Ltd. vs. CCE, Delhi III (supra) is not appropriate. In fact the appellate authority records that the facts are different in both the cases but still goes ahead and applies the ratio. As mentioned earlier in this order, the Hon'ble Supreme Court was dealing with the sale of electricity to outside parties and not to clearance of electricity to another manufacturing unit of the appellant. The input service credits attributable to the electricity sold to utility companies are not available to the appellants as held by the Hon'ble Supreme Court. This, the appellants are not contesting and have already reversed the amount towards such input service credits." 7. He has relied upon the first order which is against the judgment of Gujarat High Court where the appeal is admitted by the Hon'ble Supreme Court which is referred to in Commissioner vs. Bilag Industries Pvt. Ltd., 2015 (322) E.L.T. A174 (Guj.) which reads as under : "The appeal is admitted. The following substantial questions are framed in this appeal for determination of the Court : (a) Whether in the facts and circumstances of the case, the Tribunal has committed substantial error of law on that demand of amount for non-reversal of proportionate Cenvat credit availed by the respondent on the inputs viz. "furnace oil" for generation of Electricity and Steam and passing the same to other unit/sister concern is permissible in law? (b) Whether in the facts and circumstances of the case, the Tribunal has committed substantial error of law in holding that the extended period of limitation is not invocable by the Revenue to raise demand from the respondent? As learned counsel for respondent appears on caveat and waives service of notice, no notice need be issued to the respondent. Paper book be prepared within three months issued. After the paper book is prepared, the appeal be listed for final hearing. The Appellate Tribunal in its impugned order had held that supplies made to a 100% EOU cannot be considered as exempted goods for denying Cenvat by virtue of Rule 6(6)(ii) of Cenvat Credit Rules, 2004. Assessee used cenvatable inputs viz. furnace oil to generate electricity and also to produce steam. The Appellate Tribunal in its impugned order had held that supplies made to a 100% EOU cannot be considered as exempted goods for denying Cenvat by virtue of Rule 6(6)(ii) of Cenvat Credit Rules, 2004. Assessee used cenvatable inputs viz. furnace oil to generate electricity and also to produce steam. Part of this electricity and steam supplied to its sister concern, a 100% EOU, situated outside its factory premises. It is economical in the modern competitive working to have a larger power plant catering to power requirements of various units of same group of companies rather than having small power plants for each unit Cenvat credit cannot be denied. It was further held that issue of admissibility of credit on supplies made to a 100% EOU was under litigation and different courts given different interpretations regarding admissibility of Cenvat credit on inputs involved in the issue. Extended period of limitation not invocable." 8. He has also relied upon in Commissioner vs. Ultra Tech Cement Ltd., 2015 (320) E.L.T. A259 (S.C.) , which reads as under : 1. Leave granted. 2. For the reasons given in our judgment delivered today in the case of Maruti Suzuki Ltd. vs. Commissioner of Central Excise, Delhi-III Civil Appeal No. of 2009 - [arising out of S.L.P. (C) No. 3826 of 2009], the civil appeals herein filed by the Department are allowed and the matters stand remitted to the Adjudicating Authority who will in each case ascertain whether any excess electricity was wheeled out/cleared at a price in favour of joint ventures, vendors, sister companies, etc., and, if so, the Adjudicating Authority will calculate and charge duty or reverse credit to that extent alone. However, as stated above, the Department will not impose penalty in that regard for the disputed period(s). 3. Subject to above, the civil appeals filed by the Department are accordingly allowed with no order as to costs, and also relied upon decisions : 1. Punjab and Haryana High Court in Maruti Suzuki India Limited vs. Commr. of Central Excise, 2017 (5) G.S.T.L. 18 (P&H) , wherein it has been observed as under : "Electricity that was wheeled out to third parties was not used in manufacture of assessee's final product - Therefore LNG to extent used for production of electricity wheeled out to third parties was not input and service of inward transportation thereof was not input and service. Electricity like money would lose its identity once it is used with electricity obtained from other sources - No nexus established between final product of third party sold to assessee and electricity sold to it by assessee, no question of apportionment arose - Electricity was sold for consideration to third parties, who were independent entities and not job workers of assessee - No material on record that establishes an obligation on part of third parties to supply products to assessee in consideration of assessee selling the electricity to them - Assessee having sold electricity to third parties lost all control or rights in respect thereof - Even if electricity was by chance used for manufacture of final product sold by third parties to assessee, it would make no difference for it cannot be said that same was used by assessee itself - Assessee not entitled to credit to transportation services - Rules 2(1) and 14 of Cenvat Credit Rules, 2004 Section 73 of Finance Act, 1994." 2. Commissioner of Central Excise, Chennai-I vs. SRF Ltd., 2013 (298) E.L.T. 521 (Mad.) , wherein it has been observed as under : " .... assessee was entitled to credit on furnace oil only to extent to which electricity was used within their factory. However, Apex Court judgment was delivered subsequent to impugned decision of CESTAT allowing credit, and its distinguishment in case of electricity being wheeled out only in favour of sister units without element of sale, was not discussed. Also, CESTAT had not decided question as to whether electricity supplied to other units of assessee situated in different premises was also entitled to the credit. Hence, the matter remanded to CESTAT for factual adjudication. 3. Commissioner of Central Excise, Chennai-I vs. Indian Organic Chemicals Ltd., 2013 (298) E.L.T. 517 (Mad.), wherein it has been observed as under : ".... Furnace oil/Naphtha used in generation of electricity and steam, part of which was transferred to adjacent unit. Held : Assessee was entitled to credit on Furnace oil/Naphtha only to the extent to which they were using electricity and steam within their factory." 4. Sanghi Industries Ltd. vs. Commissioner of Central Excise, Rajkot, 2014 (302) E.L.T. 564 (Tri.-Ahmd.), wherein it has been observed as under : ".... Factory - Clubbing of Sister units situated in different premises having different registration cannot be considered as same factory. Sanghi Industries Ltd. vs. Commissioner of Central Excise, Rajkot, 2014 (302) E.L.T. 564 (Tri.-Ahmd.), wherein it has been observed as under : ".... Factory - Clubbing of Sister units situated in different premises having different registration cannot be considered as same factory. Appellants' contention that such units should be treated as same factory as the transmission lines and road linking such units under their possession and control rejected." 9. Therefore, he contended that the view taken by the Tribunal is required to be reversed and he is not entitled to the extent of the electricity which is given to the sister concern. To that extent, the matter is required to be remitted back in view of the decisions referred to herein above. 10. Counsel for appellant has taken us the CESTAT more particularly Rules 3(5) and 6 of Cenvat Credit Rules, 2004 which reads as under : "Rule 3 - CENVAT Credit - ............ (5) When inputs or capital goods, on which CENVAT credit has been taken, are removed as such from the factory, or premises of the provider of output service, the manufacturer of the final products or provider of output service, as the case may be, shall pay an amount equal to the credit availed in respect of such inputs or capital goods and such removal shall be made under the cover of an invoice referred to in Rule 9". 11. He has also relied upon the decisions :- 1. First judgment of Single Judge of Tribunal in M/s. Hindustan Zinc Ltd. vs. CCE and ST, Jaipur-II, 2016 SCC Online CESTAT 1294 , wherein it has been observed as under : "4. Heard both the sides and examined the appeal records. The short point for decision is whether or not the appellant is eligible to avail the credit on input services used in the generation of electricity which is partly cleared to their sister units who are also engaged in the manufacture of dutiable final products. The admitted fact is that the Cenvat credit on input services used in the generation of power is eligible to the appellant as long as the electricity is used in the manufacture of dutiable final product. The only dispute is relating to the usage of electricity captively within the plant of generation or also outside the generation unit by the same manufacturer. The only dispute is relating to the usage of electricity captively within the plant of generation or also outside the generation unit by the same manufacturer. Considering that the electricity has been used in the manufacture of dutiable final products and also the fact that all units belong to the appellant the denial of credit is not justifiable in the present case. Further, it is a fact that if the appellant were to follow the procedure for input service distribution the credit eligibility on part of the electricity cleared to sister unit could not have been questioned and the credit could have been passed on to the unit which is actually using the electricity or retained fully by the appellant himself without proportionate distribution. Such being the factual position, I find that the impugned orders are not sustainable. Further, the reliance placed in the impugned order on the ratio of Hon'ble Supreme Court in Maruti Suzuki Ltd. vs. CCE, Delhi III, (supra) is not appropriate. In fact the appellate Authority records that the facts are different in both the cases but still goes ahead and applies the ratio. As mentioned earlier in this order, the Hon'ble Supreme Court was dealing the sale of electricity to outside parties and not to clearance of electricity to another manufacturing unit of the appellant. The input service credits attributable to the electricity sold to utility companies are not available to the appellants as held by the Hon'ble Supreme Court. This, the appellants are not contesting and have already reversed the amount towards such input service credits." 2. D.B. Judgment of Tribunal in - M/s. Hindustan Zinc Ltd. vs. CCE and ST, Jaipur-II, Appeal Nos. E/2068, 2067/2012-EX (DB) wherein it has been observed as under : "5. On careful consideration of the submissions made by both the sides and perusal of records we find that the issue is regarding reversal of Cenvat credit attributable to the power generated and transferred to their sister concern. It is the case of the Revenue that the input services are not used in respect of the power which is generated and captively consumed. We find no merits in the arguments put forth by the adjudicating authority in denying the Cenvat credit to appellant as in an identical issue in respect of very same assessee but situated at Chittorgarh, Rajasthan. This Bench vide final order Nos. We find no merits in the arguments put forth by the adjudicating authority in denying the Cenvat credit to appellant as in an identical issue in respect of very same assessee but situated at Chittorgarh, Rajasthan. This Bench vide final order Nos. A/51895-51899/2016 held as under - "Heard both the sides and examined the appeal records. The short point for decision is whether or not the appellant is eligible to avail the credit on input services used in the generation of electricity which is partly cleared to their sister units who are also engaged in the manufacture of dutiable final products. The admitted fact is that the Cenvat credit on input services used in the generation of power is eligible to the appellant as long as the electricity is used in the manufacture of dutiable final product. The only dispute is relating to the usage of electricity captively within the plant of generation or also outside the generation unit by the same manufacturer. Considering that the electricity has been used in the manufacture of dutiable final products and also the fact that all units belong to the appellant the denial of credit is not justifiable in the present case. Further, it is a fact that if the appellant were to follow the procedure for input service distribution the credit eligibility on part of the electricity cleared to sister unit could not have been questioned and the credit could have been passed on to the unit which is actually using the electricity or retained fully by the appellant himself without proportionate distribution. Such being the factual position, I find that the impugned orders are not sustainable. Further, the reliance placed in the impugned order on the ratio of Hon'ble Supreme Court in Maruti Suzuki Ltd. vs. CCE, Delhi-III (supra) appropriate. In fact the appellate authority records that the facts are different in both the cases but still goes ahead and applies the ratio. As mentioned earlier in this order, the Hon'ble Supreme Court was dealing the sale of electricity to outside parties and not to clearance of electricity to another manufacturing unit of the appellant. The input service credits attributable to the electricity sold to utility companies are not to the appellants as held by the Hon'ble Supreme Court. This, the appellants are not contesting and have already reversed the amount towards such input service credits." 3. Commr. of C.Ex. The input service credits attributable to the electricity sold to utility companies are not to the appellants as held by the Hon'ble Supreme Court. This, the appellants are not contesting and have already reversed the amount towards such input service credits." 3. Commr. of C.Ex. and CUS, Vadodara-II vs. Indeos ABS Limited, 2010 (254) E.L.T. 628 (Guj.) wherein it has been observed as under : 4. The aforesaid findings of facts are not disputed. The grievance was that the aspect of undervaluation has not been considered by the Tribunal at all. Grievance would have merited acceptance if the ultimate exercise would have benefited the Revenue by collection of duty in the coffers of the exchequer. In the facts of the present case, admittedly no such benefit accrues to the exchequer. In the circumstances, if the Tribunal has chosen not to determine an academic issue, it is not possible to state that any legal infirmity exists in the impugned order of the Tribunal. 4. Maruti Suzuki Ltd. vs. Commissioner of Central Excise, Delhi-III, 2009 (240) E.L.T. 641 (S.C.) wherein it has been observed as under : "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 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." 5. Commr. of C. Ex., Vadodara vs. Gujarat State Fertilizers and Chem. Ltd., 2008 (229) E.L.T. 9 (S.C), wherein it has been observed as under : "10. 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." 5. Commr. of C. Ex., Vadodara vs. Gujarat State Fertilizers and Chem. Ltd., 2008 (229) E.L.T. 9 (S.C), wherein it has been observed as under : "10. At the time when leave was granted in this case, an appeal against the order passed by the Larger Bench of the Tribunal in Ballarpur Industries Limited's case (supra) was pending in this Court. Subsequently, this Court by its judgment dated 24th July, 2007, passed in the case of Collector of Central Excise and Ors. vs. Solaris Chemtech Ltd. and Ors., 2007 ECR 10 (SC) , upheld the decision rendered in Ballarpur Industries Limited's case (supra). In view of the decision of this Court in Solaris Chemtech's case (supra) and the fact that the decision in Ballarpur Industries Limited's case (supra) has already been upheld by this Court, we do not find any merit in this appeal on the first question and hold that modvat credit was allowable for the use of LSHS by the assessee. As regards the second issue involved in the case, the Revenue has accepted the decision in the case of Raymond Ltd. (supra), as it did not file any appeal against the said decision in this Court. The second issue is already decided in favour of the assessee. The decision rendered by the Tribunal is, thus, confirmed. The appeal is dismissed leaving the parties to bear their own costs." 6. Collector of Central Excise vs. Solaris Chemtech Limited, 2007 (214) E.L.T. 481 (S.C.) , wherein it has been observed as under : 2. In this batch of civil appeals the short question which arises for determination is : whether the assessee is entitled to MODVAT credit under Rule 57A on Low Sulphur Heavy Stock (LSHS) and furnace oil used for generating electricity captively consumed for the manufacture of the final products such as caustic soda, cement, etc. 8. In our view, there is no merit in this civil appeal filed by the Department. At the outset, we may clarify that electricity is not an excisable item. 8. In our view, there is no merit in this civil appeal filed by the Department. At the outset, we may clarify that electricity is not an excisable item. Further, in this batch of civil appeals we are concerned with the electricity which is generated inside the plant by heating of LSHS and which is captively consumed and used to manufacture cement/caustic soda. Rule 57A, quoted above, has an Explanation clause which stated as to what inputs are included in MODVAT credit. Explanation Clause (c) refers to "input used as fuel". This clause was introduced by Notification No. 4/94. At that time the Government made it clear that inputs used as fuel were entitled to MODVAT credit. That fuel either utilized directly or for generating electricity, as an intermediary product, is integrally connected with several operations which results in the emergence of the final product, namely, cement/caustic soda. It is important to note that without utilization of LSHS, it is not possible to manufacture cement/caustic soda. The electrolysis process is dependent on continuous flow of electricity. If there is disruption in the supply of electricity from the Electricity Board then the entire plant of the assessees would fail and the manufacture of cement/caustic soda would not take place. Therefore, LSHS would come within the ambit of the expression "used in or in relation to the manufacture of the final product". Further, in the case of Collector of Central Excise vs. Rajasthan State Chemical Works, 1991 ECR 465 (S.C.) , it has been held that any operation in the course of manufacture, if integrally connected with the operation which results in the emergence of manufactured goods, would come within the term "manufacture". This is because of the words used in Rule 57A, namely, "goods used in or in relation to the manufacture of the final products". Electricity is one form of heat. It gets generated in several ways. LSHS is a fuel used in the generation of electricity. Since, electricity is self-generated and since it comes into existence as an intermediary product, its utilization for production of final product is crucial. Hence, MODVAT credit on LSHS used in production of electricity cannot be denied. Lastly, we may point out that in order to appreciate the arguments advanced on behalf of the Department one needs to interpret the expression "in or in relation to the manufacture of final products". Hence, MODVAT credit on LSHS used in production of electricity cannot be denied. Lastly, we may point out that in order to appreciate the arguments advanced on behalf of the Department one needs to interpret the expression "in or in relation to the manufacture of final products". The expression "in the manufacture of goods" indicates the use of the input in the manufacture of the final product. The said expression normally covers the entire process of converting raw-materials into finished goods such as caustic soda, cement, etc. However, the matter does not end with the said expression. The expression also covers inputs "used in relation to the manufacture of final products". It is interesting to note that the said expression, namely, "in relation to" also finds place in the extended definition of the word "manufacture" in Section 2(f) of the Central Excises and Salt Act, 1944 (for short, 'the said Act'). It is for this reason that this Court has repeatedly held that the expression "in relation to" must be given a wide connotation. The Explanation to Rule 57A shows an inclusive definition of the word "inputs". Therefore, that is a dichotomy between inputs used in the manufacture of the final product and inputs used in relation to the manufacture of final products. The Department gave a narrow meaning to the word "used" in Rule 57A. The Department would have been right in saying that the input must be raw-material consumed in the manufacture of final product, however, in the present case, as stated above, the expression "used" in Rule 57A uses the words "in relation to the manufacture of final products". The words "in relation to" which find place in Section 2(f) of the said Act has been interpreted by this Court to cover processes generating intermediate products and it is in this context that it has been repeatedly held by this Court that if manufacture of final product cannot take place without the process in question then that process is an integral part of the activity of manufacture of the final product. Therefore, the words "in relation to the manufacture" have been used to widen and expand the scope, meaning and content of the expression "inputs" so as to attract goods which do not enter into finished goods. In the case of J.K. Cotton Spinning and Weaving Mills Co. Ltd. vs. The Sales Tax Officer, Kanpur and Anr. Therefore, the words "in relation to the manufacture" have been used to widen and expand the scope, meaning and content of the expression "inputs" so as to attract goods which do not enter into finished goods. In the case of J.K. Cotton Spinning and Weaving Mills Co. Ltd. vs. The Sales Tax Officer, Kanpur and Anr. (1965) 1 SCR 900 , this Court has held that Rule 57A refers to inputs which are not only goods used in the manufacture of final products but also goods used in relation to the manufacture of final products. Where raw material is used in the manufacture of final product it is an input used in the manufacture of final product. However, the doubt may arise only in regard to use of some articles not in the mainstream of manufacturing process but something which is used for rendering final product marketable or something used otherwise in assisting the process of manufacture. This doubt is set at rest by use of the words "used in relation to manufacture". In the present case, the LSHS is used to generate electricity which is captively consumed. Without continuous supply of such electricity generated in the plant it is not possible to manufacture cement, caustic soda, etc. Without such supply the process of electrolysis was not possible. Therefore, keeping in mind the expression "used in relation to the manufacture" in Rule 57A we are of the view that the assessees were entitled to MODVAT credit on LSHS. In our opinion, the present case falls in Clause (c), therefore, the assessees were entitled to MODVAT credit under Explanatory Clause (c) even before 16-3-1995. Inputs used for generation of electricity will qualify for MODVAT credit only if they are used in or in relation to the manufacture of the final product, such as cement, caustic soda, etc. Therefore, it is not correct to state that inputs used as fuel for generation of electricity captively consumed will not be covered as inputs under Rule 57A." 7. Commissioner of Customs and Central Excise, Noida vs. Jindal Polyester, 2014 (305) E.L.T. 43 (All.), wherein it has been observed as under : "6. Being aggrieved, the Department has come out in the present appeal. Commissioner of Customs and Central Excise, Noida vs. Jindal Polyester, 2014 (305) E.L.T. 43 (All.), wherein it has been observed as under : "6. Being aggrieved, the Department has come out in the present appeal. In the memo of appeal, the following substantial question of law has been framed : "Whether the Appellate Tribunal has correctly interpreted Rule 57AA of the Central Excise Rules, 1944/Rule 2(g) of the Cenvat Credit Rules, 2001/2002/Rule 2(k) of the Cenvat Credit Rules, 2004 in holding that Cenvat credit is admissible on the portion of Furnace Oil/LDO used for generation of electricity supplied to other units?" Heard Shri B.K. Singh Raghuvanshi, Learned counsel for the appellant and Shri Bharatji Agrawal, Learned Senior Advocate assisted by Shri Manu Khare, Advocate. The Learned Counsel for the appellant submits that in view of Rule 57AA of the Central Excise Rules Modvat credit is not admissible to the second unit. 9. The Learned Counsel for the appellant has placed reliance upon Rule 57AA particularly Clause (d) which is reproduced below : Rule 57AA. Definitions. - For the purpose of this section - (a) ............. (b) ............. (c) ............. (d) 'inputs' means all goods, except High Speed Diesel oil and Motor Spirit used in or in relation to the manufacture of the final products whether directly or indirectly and whether contained in the final product or not and includes lubricating oils cleared along with the final products, goods used as paint, or as packing materials or as fuel or for generation of electricity uses for manufacture of final products or for any other purpose within the factory of production. 14. The Learned Counsel produced various orders passed by the different Tribunals and they all do support the impugned order of the Tribunal. The Learned Counsel for the appellant could not refer any statutory regulation or rule to take a different view of the matter. It is logical that if two units are being run at one place, producing two different items and the electricity is supplied to both of them by a common generator, the Modvat facility shall be available to both the manufacturing units, unless statutorily provided otherwise. 15. It is neither expedient nor desirable unless provided otherwise statutorily to have separate electricity generating sets for different manufacturing units. The approach of the Tribunal is pragmatic and in the interest of efficiency and economy." 12. 15. It is neither expedient nor desirable unless provided otherwise statutorily to have separate electricity generating sets for different manufacturing units. The approach of the Tribunal is pragmatic and in the interest of efficiency and economy." 12. We have heard counsel for the parties. 13. While considering the matter, by a detailed judgment of the Supreme Court in case of Maruti Suzuki India Limited (supra) came to the conclusion that if the product namely electricity sold to third party or even sister concern, then it will not be entitled to Cenvat credit. 14. On the contrary, the AO observed as under : "That in this connection, as far as the present case is concerned, it is submitted that is transferring power to its own units without there being any sale. In such a situation no denial of credit can be made in the case. This is because of certain observations made in the order itself, which are as under :- (a) "Applying the said test, we hold that when the electricity generation is a captive arrangement and the requirement is for carrying out the manufacturing activity, the electricity generation also forms part of the manufacturing activity and the "input" used in that electricity generation is an "input used in the manufacture" of final product. This observation makes it clear that in the case where there is an arrangement for captive generation of electricity, it has to be treated as a requirement for carrying out manufacturing process and therefore credit would be admissible. Therefore, the key expression is "captive arrangement". Captive arrangement means arrangement made by the company for its own use and not for use by others. Therefore, when one company has various different units located at different geographical locations, all the units are manufacturing units, and the electricity generated in one unit is being consumed in the other unit of the same company in addition to it being consumed in the same unit also, it can be safely concluded that it is a case of captive generation and captive consumption of such electricity. In such a situation, the case would satisfy the test "electricity generation is a captive arrangement." 15. In such a situation, the case would satisfy the test "electricity generation is a captive arrangement." 15. In our considered opinion, therefore, Maruti's judgment will not apply in the present case and the decision which is taken by the Tribunal that the captive power plant of the sister concern, the same is against the fuel and fuel is used for the sister concern which is a part of the company itself. In that view of the matter, we are of the considered opinion that the view taken by the Tribunal is just and proper. 16. Therefore, the issue is answered in favour of assessee and against the department. 17. Hence, the appeal stands dismissed. Appeal dismissed.