2011 (6) TMI 481 - AT - Central Excise

Demand - whether the respondents are entitled for Cenvat credit on furnace oil, which was sent by them directly to the job-worker for generation of electricity, which was used by the respondents in manufacturing of their final products or not - It was held that input can be directly forwarded to job-worker for production of intermediate goods, therefore, the issue has been settled in favour of the respondents holding that the respondents are entitled for Cenvat credit on furnace oil, which was sent by them directly to the job-worker for generation of electricity, which was used by the respondents in manufacturing of their final products - Appeal is dismissed

Summary

Issues:
1. Entitlement to Cenvat credit on furnace oil sent directly to job-workers for electricity generation.

Analysis:
The appeal was filed by the Revenue against an order allowing Cenvat credit availed by the respondents on furnace oil sent directly to job-workers for electricity generation. The key issue was whether the respondents were entitled to such Cenvat credit for using the electricity in manufacturing their final products.

The Tribunal referred to previous judgments in the respondent's own case, where it was established that Cenvat credit cannot be denied to the assessee for sending furnace oil directly to job-workers for electricity generation. The High Court and the apex Court had confirmed this position, holding that inputs can be forwarded to job-workers for the production of intermediate goods. Consequently, the issue was settled in favor of the respondents, affirming their entitlement to Cenvat credit on furnace oil sent directly to job-workers for electricity generation and used in the manufacturing process.

Therefore, the Tribunal found no merit in the Revenue's appeal and dismissed it while upholding the impugned order that allowed the Cenvat credit for the respondents.