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TMI Blog2018 (8) TMI 1562X X X X Extracts X X X X X X X X Extracts X X X X ..... ctrical energy for use of manufacturing cotton yarn being taxable goods. Accordingly, he claimed 50% of Input Tax Credit in the year 2007-08 and adjusted the same as per Section 19(3) of the Tamil Nadu Value Added Tax Act, 2006 [in short 'TNVAT Act'] read with Rule 10(4) of the Tamil Nadu Value Added Tax Rules, 2007 [in short 'TNVAT Rules'], but, such proposal was summarily rejected and notice dated 20. 03. 2009 was issued by the third respondent to pay the amount which the petitioner adjusted against his claim of Input Tax Credit on the purchase of wind mill. Against the order of the original authority, a revision was filed in R. P. No. 11 of 2009 and the revisional authority remanded the matter by his order dated 16. 11. 2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ch may be different from the industrial premises. 6. The relevant factor is, whether the power generated is utilised for the manufacturing process by the concerned dealer and if it is solely for the purpose of production of yarn in a textile mill, then it should be considered as capital goods. 7. Section 19(3) of the TNVAT Act specifies that every registered dealer, in respect of purchases of capital goods (for use in the manufacture of taxable goods), shall be allowed Input Tax Credit in the manner prescribed. In the instant case, the yarn manufactured by the petitioner is a taxable good and Rule 10(4) of the TNVAT Rules, lays down the procedure for availing Input Tax Credit. The claim shall be made within thirty days from the date of co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 9, decided on 17. 08. 2009] had a similar issue and it was held as follows: "19. The question which still remains to be answered is: whether an assessee would be entitled to claim CENVAT credit in cases where it sells electricity outside the factory to the joint ventures, vendors or gives it to the grid for distribution? In the case of Collector of Central Excise v. Rajasthan State Chemical Works reported in 1991 (55) ELT 444 (SC) the test laid down by this Court is whether the process and the use are integrally connected. As stated above, electricity generation is more of a process having its own economics. Applying the said test, we hold that when the electricity generation is a captive arrangement and the requirement is for carrying ou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... immediate product. The utilization of inputs in the generation of steam or electricity not being qualified by the phrase "within the factory of production" could be outside the factory. Therefore, whatever goes into generation of electricity or steam which is used within the factory would be an input for the purposes of obtaining credit on the duty payable thereon. "" 13. By ample evidence, the petitioner had proved that he has entered into an agreement with the Power Grid Corporation for transmitting the power and getting supply and then, the relevant column proved that it is not distributed to anybody else on commercial basis. In that event, when the erection of wind mill for the purpose of generating power in the manufacturing process ..... X X X X Extracts X X X X X X X X Extracts X X X X
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