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 ...
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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 under the Central Excise Act. The issue regarding the validity of invoices from M/s. Indian Oil Corporation Ltd. was remanded to the Adjudicating Authority for verification of the dealer's registration status.
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.
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