Case Law Details
India Cements Limited Vs Commissioner of Customs (Madras High Court)
Madras High Court held that that electricity captively generated is an input, accordingly, CENVAT Credit admissible on import of coal used for generation of electricity.
Facts- The Appellant is a manufacturer of cement under the provisions of the Central Excise Act 1985. It had set up a Captive Power Plant (CPP) within its factory premises at Sankar Nagar, Tirunelveli District.
The Appellant has two other factories where cement is manufactured at Sankari, Salem District, and Dalavoi, Perambalur District and a cement grinding unit in Chennai (sister units). Under an agreement entered into with the Tamil Nadu Generation and Distribution Corporation Limited (TANGEDCO) the appellant had been permitted to wheel out a portion of the energy generated by the CPP to TANGEDCO for adjustment against the drawal of electricity from the grid by the sister units. The drawal is not for cost and no consideration is received by the Appellant for the same.
The appellant had imported coal for the generation of electricity in the CPP availing CENVAT credit of Countervailing Duty (CVD) on such imports. The present litigation commenced with the notice alleging that no statement of accounts has been maintained for the receipt and consumption of coal for the production of electricity.
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