TMI Blog2014 (9) TMI 716X X X X Extracts X X X X X X X X Extracts X X X X ..... means within the factory premises which may include more than one unit. If such electricity or steam generated within the factory of production is utilized by the assessee in more than one unit and if those units are manufacturing excisable goods, then, the assessee would be entitled to the benefit of CENVAT credit to the entire extent of utilization of such electricity or steam in all the units of its factory premises. Therefore, whatever goes into generation of electricity or steam which is placed within the factory which may consists of more than one unit would be an input for the purposes of obtaining credit on the duty payable thereon - Decided against Revenue. - CEA No. 42/2011 - - - Dated:- 19-6-2014 - MR. N.KUMAR AND MR. B. MANOHAR, JJ. For the Appellant : Sri.N.R.Bhaskar, CGSC For the Respondent : Sri. N. Anand, Adv for Sri.Ravishankar, Adv. JUDGEMENT Per: N Kumar: The Revenue has preferred this appeal challenging the order passed by the Customs, Excise Service Tax Appellate Tribunal, South Zonal Bench, Bangalore (hereinafter referred to as 'the Tribunal' for short), wherein the Tribunal has confirmed the order passed by the Commission ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eal to Commissioner of Central Excise (Appeals)-I, Bangalore (hereinafter referred to as 'the First Appellate Authority'). The Appellate Authority relying upon the judgment in the case of M/s. SRF LTD. v/s CCE, CHENNAI reported in 2005 (191) E.L.T. 887 (Tribunal, Chennai) held that the assessee has used the electricity generated partly in the unit where the electricity is generated and partly used in the other units which is situated in the very same premises is entitled to the benefit of CENVAT Credit and accordingly the order passed by the Assessing Authority was set aside and the appeal was allowed. Being aggrieved by the said order, the Revenue preferred an appeal to the Tribunal. The Tribunal relying on the decision of the Tribunal in DHAMPUR SUGAR MILLS LTD. v/s CCE reported in 2007 (129) ELT 73 (T) which has been upheld by the Hon'ble Supreme Court wherein it was held that the factories are situated in the same compound are to be treated as one and the units have to be treated as single Factory. The order passed by the Commissioner was in accordance with law and therefore the Tribunal dismissed the appeal filed by the Revenue. Aggrieved by the said order, the Rev ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... directly or indirectly and whether contained in the final product or not and includes lubricating oils, greases, cutting oils, coolants, accessories of the final products cleared along with the final product, goods used as paint, or as packing material, or as fuel, or for generation of electricity or steam in or in relation to manufacture of final products or for any other purpose, within the factory of production; (ii) all goods, except light diesel oil, high speed diesel oil and motor spirit, commonly known as petrol and motor vehicles, used for providing any output service; The aforesaid definition makes it clear that, input means all goods used in or in relation to the manufacture of final products whether directly or indirectly and whether contained in the final products or not and includes lubricating oils, greases, cutting oils, coolants, accessories of the final products cleared along with the final product, goods used as paint, or as packing material, or as fuel, or for generation of electricity or steam used in or in relation to manufacture of final products or for any other purpose, within the factory of production. 9. The word factory has been defi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ervice meant for use in the manufacture of dutiable final products or in providing output service and the quantity of input meant for use in the manufacture of exempted goods or services. However he would be entitled to CENVAT credit only on that quantity of input or input service which is intended for use in the manufacture of dutiable goods. Therefore, it is clear that the assessee manufacturer is entitled to CENVAT Credit on inputs which is used in the manufacture of dutiable goods. 12. In view of clear language in the statutory provisions coupled with the fact that the factory includes more than one premises to be eligible for CENVAT Credit, an assessee has to use the input in the manufacture of dutiable goods in his factory. If the factory includes more than one unit and if the assessee uses this input in the manufacturing of excisable goods in both the units, he would be entitled to CENVAT Credit. 13. The Apex Court in Vikram Cement (supra) case has held as under: It appears to us on a plain reading of the clause that the phrase within the factory of production means only such generation of electricity or steam which is used within the factory would qualify ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... more than one unit and if those units are manufacturing excisable goods, then, the assessee would be entitled to the benefit of CENVAT credit to the entire extent of utilization of such electricity or steam in all the units of its factory premises. Therefore, whatever goes into generation of electricity or steam which is placed within the factory which may consists of more than one unit would be an input for the purposes of obtaining credit on the duty payable thereon. 16. In the instant case, the assessee is having two units; one DTA unit and another EOU unit. Both are situated in the same factory premises. Both are manufacturing excisable goods. The assessee has purchased furnace oil from which, the steam is generated within the said factory premises. The said steam is utilized by the assessee in manufacturing excisable goods in both the units which are situated within the same compound, which falls within the definition of the word factory and therefore, the assessee is entitled to CENVAT credit in respect of entire volume of steam used in the manufacture of excisable goods by both the units. That is precisely what the Appellate Authorities have held and granted relief to ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
