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CENVAT - Credit is not admissible on inputs that are attributable to electricity produced in captive power plant and sold to Ajmer Vidyut Vitran Nigam Ltd - Penalty imposable: CESTAT

By TIOL News Service

NEW DELHI, FEB 01, 2015: THE CENVAT Credit on inputs used in generation of electricity in captive power plant was denied on the premise that some of the electricity was sold to M/s. Ajmer VidyutVitran Nigam Ltd. and some electricity was cleared to their sister unit.

After hearing both sides the CESTAT observed -

++ The appellant is not entitled to take CENVAT Credit on inputs which are attributable to the electricity sold to M/s. Ajmer VidyutVitran Nigam Ltd. Therefore, appellants are required to reverse the amount of inputs used therefor .

++ The appellant is entitled to take CENVAT credit in respect of inputs attributable to the electricity which was transferred to their sister unit for manufacturing of final product as held by the Tribunal in their own case by Final order no.A/54457/2014-SM(BR) dated 07.11.2014.

++ As the fact of clearance of electricity to M/s. Ajmer VidyutVitran Nigam Ltd. came to the knowledge during the course of investigation otherwise the appellant would not have reversed the said credit,therefore, appellant is liable to be penalised on that account.

++ A penalty of Rs.4000/- is imposed on the appellant.

The appeal was disposed of.

(See 2015-TIOL-227-CESTAT-DEL)


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