Cenvat credit on waste plastic fuel used to generate steam for manufacture was held admissible.

Cenvat credit was held admissible on plastic bhusa used as fuel in a multi-fuel boiler to generate steam for manufacture of kraft paper. The material was treated as an input in the manufacturing process because the steam produced from it was used in the final product's manufacture, and the fact that the plastic bhusa was waste and scrap did not by itself disqualify credit. On that basis, the Revenue's challenge failed.

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Issues: Whether Cenvat credit was admissible on plastic bhusa used as fuel in the boiler for generation of steam in the manufacture of kraft paper.

Analysis: The plastic bhusa was used as fuel in a multi-fuel boiler for generating steam, and the steam was used in the manufacture of the final product. The manufacturing activity was not disputed, and the finding on record was that the material functioned as an input in the manufacturing process rather than being disqualified merely because it was waste and scrap plastic.

Conclusion: Cenvat credit on the plastic bhusa was admissible, and the Revenue's challenge failed.

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