9911796707
TMI Blog2007 (1) TMI 460X X X X Extracts X X X X X X X X Extracts X X X X ..... er it can be considered that the inputs were received by M/s IRTL only. We further find that the CBEC vide its Circular No. 637/28/02 has clarified that the Cenvat credit is admissible only when inputs or capital goods are used by the manufacture within the factory premises (except when inputs or capital goods are used/sent for job work outside factory). Since in this case the inputs have been sent outside for job work, the present case is squarely covered by this clarification and therefore the furnace oil satisfy the definition inputs under Rule 2(g). Further furnace oil used as fuel is covered by the main definition of inputs under Rule 2(g) which says inputs means all goods except high speed diesel oil used in or in relation to the manu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n 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 the furnace oil to M/s. IRSL at all. In fact M/s. IRSL received entire furnace oil on their own account as an input for the manufacture of polyester product and took credit on the said input. This furnace oil is stored in their own tanks. Later on part of the furnace oil is shown to be sold to M/s. IRTL under invoice by reversing the credit taken on the furnace oil and transferred to the tanks earmarked for exclusive use of IRTL. This furnace oil alongwith their own furnace oil is used in the production of electricity and the electricity so produced is then distribut ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 by the unit and what is received is electricity which is not an excisable product, the same is not covered under the definition of job work. The show cause notice was adjudicated by the Commissioner. 3. During the course of adjudication proceedings appellant took a plea that the inputs were sold by M/s. IRSL by paying duty of amount equal to the credit availed under Rule 3(4) of the Cenvat Credit Rules, to M/s. IRTL who can take credit of the same under Rule 3(5) as there is no bar that the inputs cannot be obtained from the job worker and since M/s. IRTL had no storag ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... entral 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 referred to the CBEC Circular No. 146/57/95-CX dated 12-09-1995 and F. No. 345/2/2000-TRU, dated 29-08-2006 which clarify that credit cannot be denied to the supplier of inputs in a case where the goods are directly sent to the job worker and therefore credit in the instant case cannot be denied to the appellants on the ground that the furnace oil was not received by the appellants in their factory but was directly received by M/s. IRSL who used the same in generation of the electricity. 4. All the above pleas were rejected by the Commissioner on the ground that since th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 never received in the premises of the appellant. However, as per the Tribunal decision in the case of Colts Auto Ltd. Goa Industrial Products (cited supra) and the Board's clarification referred to by the appellants this shall not result in denial of the credit when other conditions are satisfied. Even Rule 4(5) does not suggest that inputs should be first received by the principal manufacturer & thereafter should be send to job worker. Further a view can be taken that since tanks are earmarked for exclusive use of M/s. IRTL, they belong to them and accordingly receipt in the ta ..... X X X X Extracts X X X X X X X X Extracts X X X X
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