Home Case Index All Cases Central Excise Central Excise + AT Central Excise - 2019 (12) TMI AT This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2019 (12) TMI 1016 - AT - Central ExciseCENVAT Credit - Furnace Oil consumed for generation of electricity, a part of which was not used in or in relation to manufacture of their final product - recovery alongwith interest and penalty - HELD THAT:- The appellant assessee had rightly availed Cenvat Credit on Furnace Oil used in the generation of electricity in a captive power generating machine, even though a part of such generated electricity is used in factory office, workers’ canteen etc. In terms of the definition of ‘input’ as was prior to 01.04.2011, input includes goods used for generation of electricity used in or in relation to manufacture of final products or for any other purpose, within the factory of production - Further, the terms ‘factory means any premises, including the precincts thereof, wherein or in any part of which excisable goods other than salt are manufactured or process, connected to manufacturing, is carried out. Oxfotd Dictionary defines the terms ‘precincts’ as “the area within the walls or perceived boundaries of a particular building or place”. Hence, the terms ‘factory’ includes all the facilities, including that of manufacturing process, within its boundary wall. As was prior to 01.04.2011, CENVAT credit was available on goods used in generation of electricity and consumed within the boundary wall of the factory of production in or in relation to manufacture of final products, or for any other purpose which may not have direct relation to manufacture - This view was also ratified by the Hon’ble Supreme Court in the judgement in the case of Maruti Suzuki Ltd. Vs. Commissioner of Central Excise, Delhi-III [2009 (8) TMI 14 - SUPREME COURT] wherein the Hon’ble Court has inter alia observed that 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) - However, with effect from 01.04.2011, with the abolition of the phrase “used in or in relation to manufacture of final products” from the definition of ‘input’ vide Notification No.3/2011-CE(Nt) dated 01.03.2011, the scope of input has not only been more widened, it has also become more inclusive. With effect from 01.04.2011, ‘input’ inter alia, includes all goods used for generation of electricity for captive use. It would be pertinent to mention that the Show Cause Notice alleges consumption of Furnace Oil whereas the appellants have tried to convince the authorities below that after installation of the electricity there was no occasion for them to continue with the old system and they had stopped using any Furnace Oil for generation of electricity for smooth running of their manufacturing facility - Appeal allowed - decided in favor of appellant.
|