Principal Commissioner Vs Indian Metal and Ferro Alloys Limited (Orissa High Court)
In the case of Principal Commissioner vs. Indian Metal and Ferro Alloys Limited, the Orissa High Court dismissed the revenue’s appeal challenging the Cenvat credit claim on surplus electricity supplied between the respondent’s two units. The case arose from an order by the Customs, Excise, and Service Tax Appellate Tribunal (CESTAT), Kolkata, which ruled in favor of the respondent. The revenue argued that surplus electricity supplied to another unit free of cost should not entitle the respondent to Cenvat credit on input services used to generate that electricity. However, the respondent demonstrated that the electricity was used in manufacturing dutiable goods, satisfying the Cenvat Credit Rules. The court found no substantial question of law in the revenue’s argument, noting that the electricity was captively used across the respondent’s units, both of which were defined as factories under the Central Excise Act, 1944. The court relied on previous rulings, including Shree Cement Ltd. vs. CCE, where it was held that credit is allowed as long as electricity is used to manufacture dutiable products. Consequently, the court upheld the Tribunal’s decision, confirming the respondent’s eligibility for Cenvat credit on surplus electricity used for manufacturing.
