Cenvat Credit on PNG Gas

[RAM SHARMA]

Dear Experts,

Earlier we have used diesel to generate electricity for factorty production. Diesel is restricted to take cenvat credit. Now we have used png gas for generate electricity. Can we take cenvat credit.

Thanks

[YAGAY andSUN]

Yes, you can.  Since in the definition of Input under Rule 2(k) of the CENVAT credit Rules as effective from 01-04-2011, inputs means ---

i  ............................

ii   .........................

iii  all goods used for generation of electricity or steam for captive use; or

iv ...........................

but excludes -

A) Light diesel oil, high speed diesel oil or motor spirit, commonly known as petrol;

Since these goods have been specifically excluded and other than these goods all goods included, used for generation of electricity or steam for captive use, therefore, you can avail the CENVAT credit.  Please also inform the Central Excise Department accordingly, so that suppression of material plea can not  used by them. 

AI Summary

CENVAT Credit Allowed for PNG Gas Used in Electricity Generation Under Rule 2(k); Notify Excise Department for Compliance. A user inquired whether CENVAT credit can be claimed for PNG gas used to generate electricity, as diesel, previously used, is restricted from credit. An expert confirmed that CENVAT credit is permissible for PNG gas under Rule 2(k) of the CENVAT Credit Rules, effective from April 1, 2011. This rule allows credit for goods used to generate electricity or steam for captive use, excluding specific oils like diesel. The expert advised notifying the Central Excise Department to prevent any claims of information suppression.