2004 (3) TMI 162 - AT - Central Excise

Tribunal Upholds Cenvat Credit for Inter-Unit Electricity Supply; Validity of Invoices Sent for Further Review.

The Tribunal ruled in favor of M/s. Diamond Cements, allowing Cenvat credit for electricity supplied between units, as they are considered one factory ... Cenvat/Modvat - Duty paying documents not registered dealers - HELD THAT:- The decision, relied upon by the Commissioner (Appeals), i.e. Associated Cement Co. Ltd. [2002 (6) TMI 459 - CEGAT, NEW DELHI] has been passed by the learned Single Member of the Tribunal, which is not binding on us. Further, as pointed out by the learned Advocate, the decision in the case of Dhampur Sugar Mills Ltd. [2001 (1) TMI 129 - CEGAT, COURT NO. IV, NEW DELHI], was not considered though referred to by the learned Single Member in A.C.C. case (supra). We, therefore, hold that the benefit of Cenvat credit in respect of the impugned inputs cannot be denied to the appellants on the ground that the part of the electricity is supplied to Diamond-II. Coming to the question whether the Cenvat credit is available to the appellants on the strength of the invoices issued by the dealer of IOC at Jhansi, we observe that no proof was provided by the appellants to both the lower authorities in support of their contention that the dealer was duly registered with the Central Excise Department. Learned Advocate has now produced a registration certificate which certainly needs verification by the adjudicating authority. Accordingly, on this aspect, we remand the matter to the jurisdictional Adjudicating Authority to ascertain whether the dealer at Jhansi was registered with the Department or not at the relevant time. All the appeals are disposed of in above manner. Issues involved: Availability of Cenvat Credit for M/s. Diamond Cements.Issue 1 - Availability of Cenvat Credit for electricity supplied outside factory premises:The appellants, M/s. Diamond Cements, had two units adjacent to each other engaged in cement manufacturing. They claimed Cenvat Credit on duty paid for items used as fuel and maintenance, including electricity generated in Diamond-I and supplied to Diamond-II. The Revenue denied credit citing electricity supply outside the factory premises. The Tribunal noted that having separate registrations for units does not necessarily mean separate factories, as per the definition of 'factory' in the Central Excise Act. Previous cases like Dhampur Sugar Mills Ltd. and J.K. Synthetics Ltd. supported the view that units in the same premises are considered one factory. The Tribunal held that Cenvat credit cannot be denied based on electricity supply between the units.Issue 2 - Validity of invoices for Cenvat Credit:Cenvat credit was also disallowed to M/s. Diamond Cements due to invoices from M/s. Indian Oil Corporation Ltd., Jhansi, not being considered valid duty-paying documents. The appellants argued that Indian Oil Corporation Ltd., Jhansi, was a registered dealer with the Department, supported by a registration certificate. The Revenue contended that the certificate needed verification. The Tribunal remanded this aspect to the Adjudicating Authority for confirmation of the dealer's registration status at the relevant time.In conclusion, the Tribunal ruled in favor of M/s. Diamond Cements, allowing Cenvat credit for inputs and directing verification of the dealer's registration for further proceedings.