CENVAT credit on outsourced electricity generation upheld where furnace oil was used by a job worker for manufacturing operations.

CENVAT credit on furnace oil used to generate electricity through a job worker was held admissible where the electricity was used in the manufacturer's business, even though the oil was not received in the manufacturer's factory and no captive power plant existed. The Court applied the principle that inputs used for generation of electricity employed in manufacture can qualify for credit, and that direct receipt of the input in the assessee's factory is not indispensable when the statutory scheme permits movement to a job worker. The controversy was treated as governed by binding precedent, with no change in law or perversity in the Tribunal's reasoning.

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Issues: Whether CENVAT credit on furnace oil used for generation of electricity by a job worker was admissible when the oil was not received in the appellant's factory and the appellant had no captive power plant.

Analysis: The dispute turned on the scope of input credit where electricity was generated through furnace oil supplied for use by a job worker and the resulting electricity was used in the manufacturer's business. The Court applied the settled principle that inputs used for generation of electricity employed in manufacture can qualify for credit even when the generation activity is outsourced, and that receipt of the input within the manufacturer's own factory is not indispensable where the statutory scheme permits movement of inputs to a job worker. The Court treated the controversy as already concluded by binding precedent and found no change in law or perversity in the Tribunal's reasoning.

Conclusion: CENVAT credit was admissible, and the challenge to the Tribunal's order failed.

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