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TMI Blog2015 (4) TMI 1019X X X X Extracts X X X X X X X X Extracts X X X X ..... in the manufacture of final product. 2. The brief facts of the case are that the respondent is manufacturer of cement. To manufacture cement, electricity is being used. For generation of electricity, the respondent procured pet coke which was sent to their sister unit for generation of electricity. Electricity so generated was received by the respondent which in turn is used in manufacture of final product i.e. cement. Revenue is of the view that pet coke which has been used in the generation of electricity outside the factory premises, the respondent is not entitled to take Cenvat credit on pet coke. Therefore the case was booked against the respondent and Cenvat credit was denied along with interest. Consequently, duty was demanded along ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ted and there is no one to one correlation of the inputs used. 4. On the other hand, learned Counsel appearing on behalf of the respondent submits that in the case of Maruti Suzuki Ltd. (supra), the Hon'ble Apex Court has relied on the decision of Vikram Cement [2006 (194) ELT 3 (SC)] and held that electricity can be generated outside the factory and same should be used in manufacturing of the final product and same view was taken by this Tribunal in the case of Haldia Petrochemicals Ltd. (supra) and which has been followed in the case of Sanghi Industries Ltd. vs. CCE [2006 (206) ELT 575 (Tri-Del)] 5. Heard the parties. Considered the submissions. 6. The short issue before me is that whether the respondent is entitled to take Cenvat cre ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... en 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. However, to the extent the excess electricity is cleared to the grid for distribution or to the joint ventures, vendors, and that too for a price (sale) the process and the use test fails. In such a case, the nexus between the process and the use gets disconnected. In such a case, it cannot be said that electricity generated is used in or in relation to the manufacture of final product, within the factory. Therefore, to the extent of the clearan ..... X X X X Extracts X X X X X X X X Extracts X X X X
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