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 for PNG gas when used to generate electricity for captive use is permitted under the input definition. PNG used to generate electricity for captive use qualifies as an input eligible for Cenvat credit because the input definition covers goods used to generate electricity or steam for captive use, except for expressly excluded fuels such as light diesel oil, high speed diesel oil and motor spirit; taxpayers should inform the Central Excise Department when claiming such credit.