2007 (1) TMI 460

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....ir intention to send furnace oil to M/s. Indorama Synthetics (India) Limited (IRSL) for the manufacture of electricity on job work basis in terms of Notification No. 214/86-C.E. The entire quantity of electricity so generated by IRSL would be supplied to them. They undertook to produce the evidence that the goods have been used in the manufacture of final product on which the duty shall be discharged by them. They accordingly took credit of Rs. 1,13,17,607/- on furnace oil said to have been sent by them and used in generation of electricity on job work basis which in turn was used by them for the manufacture of final product. 2. Certain investigations were carried out by the department, when it was gathered that M/s. IRTL was not sending....

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....able annexed to the said notification manufactured in factory as a job work and used in relation to the manufacture of final products specified in Column II of the said table to the said notification and subject to the fulfillment of conditions of para 1 and 2 of the said notification. In this case electricity was not an excisable goods and was not specified in the table annexed to the notification. Further since job work means processing or working upon raw material or semi-finished goods supplied to the worker so as to complete a part or whole of the process resulting in the manufacture or finishing of an article and since in the present case no process is carried out nor any work is done on the goods and the inputs are not received back ....

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....by the Tribunal in the case of Ballarpur Industries v. CCE, 2000 (116) E.L.T. 312 and in the case of SRF Ltd. v. Commissioner of Central Excise, Chennai, 2005 (191) E.L.T. 887 (Tri.-Chennai) wherein it was held that use of electricity in production of final goods in another factory also satisfies the requirement of Rule 2(g) of the Cenvat Credit Rules, 2002. Another plea taken was that the inputs can be send directly to the premises of job worker and credit cannot be denied on this ground as has been held by the Tribunal in the case of Colts Auto Ltd. v. Commissioner of Central Excise, Delhi-IV, 2005 (186) E.L.T. 289 (Tri.-Del.) and Goa Industrial Products v. Commissioner of Central Excise, Goa, 2005 (181) E.L.T. 222 (Tri.-Mumbai). It also ....

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.... that the goods are received back in the factory within 180 days of their being sent to the job worker. In this case it is an admitted fact that the furnace oil has been sent to M/s. IRSL who have used it for generation of electricity which was supplied to the appellants within 180 days of the receipt of furnace oil. The use of the word "for any other propose" would include processing of inputs for manufacture of electricity which in turn has been used in the manufacture of final product. The condition of Rule 4(5) are therefore squarely fulfilled and its immaterial whether the electricity is an excisable product or not as this is not a condition laid down under the rule. The only flaw pointed out by the department is that the inputs were n....