TMI Blog2005 (7) TMI 215X X X X Extracts X X X X X X X X Extracts X X X X ..... should be interpreted in conformity with normal commercial practice. Therefore, the manner of use should be accepted as to the economical, efficient and convenient manner of use. A contrary interpretation would lead to frustrating the purpose of law in granting the exemption/Modvat credit. Generation of electricity in one unit for use in all the neighbouring units of a manufacturer is more efficient and economical than setting up generating facility at each and every factory. Since the appellant has done so, that manner of use should be accepted as a manner not contrary to the intent and purpose of the law. Thus, the appeal is allowed, with consequential relief to the appellant. - SHRI C.N.B. NAIR, MEMBER (T) AND T. ANJANEYULU, MEMBER (J ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ries 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 for manufacture of final products or for any other purpose, within the factory of production . (emphasis supplied). 4. The finding is that, according to the definition, input includes only those goods used for generation of electricity used for manufacture of final products or for any other purpose within the factory of production. The impugned order has confirmed the view that since credit is dependent upon uses of electricity within the factory of production the inputs used in the generation of electricity which gets wheeled out to other units becomes ineligible. The impug ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... was used in another unit for manufacture of final products and the Tribunal took the view that the factory of production referred to in clause (d) is the factory of production not of electricity, but of final product . [wording of (g) is similar] 6. The learned DR has submitted that it is a requirement of Cenvat Rules that the electricity generated from the modvatted furnace oil should be used in the same factory where electricity was generated. According to the learned DR the definition of inputs makes this position clear. 7. We find that this issue came up before the Tribunal in the case of Essar Steel Limited and the Tribunal held that use of electricity need not be in the factory where it is generated. Use in production in another facto ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... been taken by the Tribunal in Ballarpur Industries Ltd. v. CCE, 2000 (116) E.L.T. 312. In the second paragraph numbered 7 of the order (there are two paragraphs with the same number), the Larger Bench said, Therefore, while the non-fuel input could not be covered by clause (d) introduced on 16-3-1975. This, according to us, is the true scope of the first explanation of clause (d). The second line of Explanation to clause (d) refers to electricity used in the factory for manufacture of final product or for any other purpose . Hence, the inputs used for generation of electricity, which is used in the factory of production of final product or for any other purpose, are inputs, and the duty paid on them can be taken as credit to discharge the d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... said notification 118 to indicate that the use must be such as cannot be repeated or that it must be such as results in loss of further utility as such article . It is clear from the above, that the case law relied upon by the Commissioner is not valid for deciding the present case. 8. There is no dispute in the present case that the input in question remains notified and credit is available. There is also no dispute that the input in question has been used by the appellant in the generation of electricity and electricity so generated was used in the manufacture of excisable goods. The only quarrel is about the place of use of the electricity. It is well-settled that tax laws should be interpreted in conformity with normal commercial pract ..... X X X X Extracts X X X X X X X X Extracts X X X X
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