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2016 (6) TMI 402 - CESTAT NEW DELHI

2016 (6) TMI 402 - CESTAT NEW DELHI - TMI - Eligibility to avail the credit on input services - generation of electricity which is partly cleared to their sister units who are also engaged in the manufacture of dutiable final products - Held that:- 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 appell .....

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i - III (2009 (8) TMI 14 - SUPREME COURT) is not appropriate. 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. - Decided in favour of assessee. - Excise Appeal No. 60581-60584 of 2013 and 51724 of 2015 (SM) - Final Order No. 51895-51899/2016 - Dated:- 27-5-2016 - SHRI B. RAVICH .....

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They are having a power generation plant in their unit at Chanderia. They were availing Cenvat credit on GTA services for inward transportation of coal/LDO for the power plant. A dispute arose regarding their entitlement for full amount these credits, as the electricity generated in the said plant was cleared partly to their other two smelting units and also partly sold to utility companies. The Revenue proceed to demand and recover input service credit of ₹ 36,06,165/-. The proceedings in .....

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were not contesting their liability to reverse the proportionate input services credit. They have already reversed an amount of ₹ 2,17,029/- attributable to these credits. These reversals were made periodically at regular intervals. However, regarding the eligibility of input service credit attributable to electricity generated and cleared to two other units of the appellant he submitted that the other units were also engaged in the manufacture of dutiable final products and as such the cr .....

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of excisable products. In their case the credit availability cannot be disputed as even otherwise these credits availed by them in their Chanderia unit could be distributed to their other two units by following the prescribed procedure for input service distribution. In such case not following the procedure of ISD by itself cannot be the reason to deny of credits as held by the Tribunal in Doshion Ltd. vs. CCE, Ahmedabad reported in 2013 (288) E.L.T. 291 (Tri. - Ahmd.) as affirmed by the Hon bl .....

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igible for credit when they are used by the manufacturer in their unit in or in relation to the manufacture of dutiable final products. The electricity cleared to sister units of the appellant is not used in the dutiable final product of the appellant unit. As such, he submitted that the denial of benefit of credit is proper. 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 .....

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