CCR ON FUELS USED FOR GENERATION OF ELECTRICITY

[CS RAHUL AGARWAL]

Sir/ Madam,

Can we avail cenvat credit on fuels used in generation of electricity ?

Rule 2(k) of CCR 2004 provides that CCR is admissible for inputs used in generation of electricitty, however excludes fuels & Other inflameables. So what would be the correct position in light of M/s Jindal Stainless Ltd. Versus Commissioner, Central Excise & Service Tax, Rohtak, 2015 (6) TMI 404 - CESTAT NEW DELHI

 

[PAWAN KUMAR]

Dear Sir,

Rule 2(k)(ii) of CENVAT Credit Rules, 2004 clearly covers all goods used for generation of electricity or steam for captive use, therefore credit is admissible and it is the correct position.

[CS RAHUL AGARWAL]

Dear Pawan Ji,

It covers goods for generation of electricity but excludes fuel right ? and i suppose to geerate electricity we use fuel also ...so can we avail credit on this fuel/diesel used for electric genertaion in case where such fuel is excluded in definition of input ??

[Rajagopalan Ranganathan]

Sir,

Rule 2 (k) of CENVAT Credit Rules, 2004 excludes from the definition of "inputs" only light diesel oil, high speed diesel oil or motor spirit, commonly known as petrol. since furnace oil is not included in the above mentioned exclusion clause you eligible to avail the credit of duty paid on furnace oil which is used for generation of electricity since rule 2 k (iii) includes in the definition of inputs all goods used for generation of electricity or steam for captive use.

[CS RAHUL AGARWAL]

Thank you so much Sir for your prompt response and highly clarifying opinion. Actually i was with illusion that for generating electricty we need fuels / diesel / spirits. I came to know from you only that it is furnance oil used for the same. Thanks a lot.

Also Respected Sir, can you please confirm me once whether NN. 155/86 (T) is effective or not ?? i am not getting it any notification rescinding the said notifiction so seeks your valuable advice

AI Summary

Cenvat credit on fuels: credit admissible for furnace oil used in captive electricity generation despite exclusions for diesel and petrol.
Rule 2(k) treats goods used for generation of electricity for captive use as inputs but excludes light diesel oil, high speed diesel oil and motor spirit; fuels not so excluded, for example furnace oil, qualify as inputs and attract admissible CENVAT credit when used for captive electricity generation.