TaxTMI 
TaxTMI 
2005 (7) TMI 215
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....e in the present case is about part of the Modvat credit taken, on furnace oil going into the generation of electricity at the Manali unit. The furnace oil received in this unit is used in the generation of electricity. Part of the electricity so generated is used in the Manali unit itself and the remaining is wheeled out to the other manufacturing unit of the appellant and is used in those units. The dispute is in relation to the Modvat credit taken on that portion of furnace oil which has gone into the manufacture of the electricity wheeled out to the other units and used in those units. The dispute is for the period March, 2002 to August, 2002. 3. The Revenue has taken a view that no credit could be availed in view of the definition o....
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.... view taken by the authorities is erroneous for two reasons. The first contention is that this is a case of use "as fuel" and to such a case, the clause relating to use "for manufacture of final product within the factory of production" does not apply. This argument is on a plane reading of the definition clause. It is also being submitted that the Tribunal has held in the case of Ballarpur Industries Ltd., 2000 (116) E.L.T. 312 that fuel oil used in the generation of electricity is entitled to Modvat credit as goods used "as fuel". The second argument is that, even if it is treated as use for generation of electricity, use of such electricity in other units of the appellant would satisfy the requirement of "used for manufacture of final pr....
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....sentative of the appellant that the term "factory of production" in this clause refers, not to the factory where the electricity is produced, but to the factory where the final product is produced. Clause (d) is far from clear. It speaks of inputs used for generation (emphasis ours) of electricity, used in the factory of production. It could be argued that if the intention were to restrict the use of electricity to the factory where it is generated, the reference would be to the factory of generation, and not the factory of production. Clause (a) of the Explanation under Rule 57A, as it stood at the relevant time, used the same explanation, "the factory of production". It speaks of inputs, which are manufactured and used within the factory ....
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....s construing the meaning of "used" occurring in the expression "used in the factory in which it is manufactured". The Tribunal took the view that "used" has to be understood as "using up" or "consumption". It is being pointed out that this interpretation remains overruled by the decision of the Hon'ble High Court of Bombay in the case of Indian Hume Pipe Co. Ltd. v. Union of India - 1986 (26) E.L.T. 685. We read the relevant portion of the judgment below :- '10. The Central Excise Tribunal, New Delhi, has in the case of National Organic Chemical Industries Ltd. v. Collector of Central Excise, Bombay -1984 (17) E.L.T. 465, held that the word "use" in the first paragraph of the said notification 118 amounts to "using up" or "consumpt....