oInput credit taking against supply of materials to Power project

[Varghese Kurian]

Sir,

We are manufacturer and supplier to BHEL. BHEL has given us PAC to supply of materials to NTPC MEJA Power projects. We have taken Excise credit for Inputs and supplied to BHEL ,NTPC site under nil duty. Excise auditor says only imports are allowed to take credit as per Rule 6(6)vii ,local supply input excise duty cannot be taken credit.Kindly help us to counter the argument

AI Summary

Input credit entitlement where supplies to tariff based power projects are treated as deemed exports, enabling credit on local inputs.
Input tax credit is permissible where excisable goods removed without payment of duty are supplied to power projects procured through tariff-based competitive bidding or against international competitive bidding; such clearances are treated as deemed exports and therefore eligible for input credit, extending eligibility to local supplies made to qualifying power projects under the governing notification.