Custom, Excise & Service Tax Tribunal
Cce, Chennai vs M/S. Tamilnadu Petroproducts Ltd on 10 February, 2010
IN THE CUSTOMS, EXCISE & SERVICE TAX
APPELLATE TRIBUNAL
SOUTH ZONAL BENCH, CHENNAI
E/724/2003
(Arising out of Order in Appeal No. 61/2003 (M-I) and 62/2003 (M-I) dated 24.06.2003, passed by the Commissioner of Central Excise, (Appeals), Chennai).
For approval and signature
Honble Ms. JYOTI BALASUNDARAM, Vice President
Honble Dr. CHITTARANJAN SATAPATHY, Technical Member
_________________________________________________________
1. Whether Press Reporters may be allowed to see the :
order for Publication as per Rule 27 of the
CESTAT (Procedure) Rules, 1982?
2. Whether it should be released under Rule 27 of the :
CESTAT (Procedure) Rules, 1982 for publication
in any authoritative report or not?
3. Whether the Honble Member wishes to see the fair :
copy of the Order.
4. Whether order is to be circulated to the :
Departmental Authorities? _________________________________________________________
CCE, Chennai : Appellant
Vs.
M/s. Tamilnadu Petroproducts Ltd. : Respondent
Appearance Shri V.V. Hariharan, JCDR, for the appellant Shri S. Ignatius, Advocate, for the respondent CORAM Ms. JYOTI BALASUNDARAM, Vice President Dr. CHITTARANJAN SATAPATHY, Technical Member Date of hearing : 10.02.2010 Date of decision : 10.02.2010 FINAL ORDER No._____________ Per: Dr. Chittaranjan Satapathy, Heard both sides. The appellants have different units in the same premises. However, electricity generated in one unit has been supplied to the other unit through the grid of the TNEB. The lower appellate authority has held such supply of electricity to be captive consumption and has therefore allowed cenvat credit on inputs such as furnace oil and lube oil used in the generation of electricity.
2. The department is in appeal stating that the TNEB has not transmitted the entire quantity of electricity but has retained 15% of the same. On this ground, the department seeks to deny proportionate credit in respect of 15% of the electricity retained by the TNEB as the same cannot be construed as captive consumption.
3. Shri V.V. Hariharan, Ld. JCDR supports the departments appeal stating that the 15% electricity retained by TNEB would have been supplied elsewhere and the same has to be therefore taken as not captively consumed. He, however, fairly agrees that this point was not raised earlier as the entire credit was denied by the original authority holding the entire quantity of electricity as not captively consumed.
4. Shri S. Ignatius, Ld. Advocate appearing for the respondents states that the entire quantity of electricity has been sent for use in their sister unit. Under the statutory obligation, the same has been sent through the TNEB grid and 15% of the electricity has been retained by the TNEB. According to him, applying the ratio of the judgment of the Honble Supreme court in the case of BPL Display Devices Ltd. Vs. CCE, Ghaziabad 2004 (174) ELT 5 (S.C), the phrase for use has to be liberally construed and the entire quantity of the electricity should be held to be captively consumed.
5. After hearing both sides, we find that the issue raised by the department in regard to 15% of the electricity retained by the TNEB merits consideration. However, since the same has been raised for the first time before the Tribunal, we set aside the impugned order to the extent appealed against and remand the matter to the original authority for fresh consideration of the same in accordance with law and after giving adequate opportunity of hearing to the respondents.
6. The appeal is thus allowed by way of remand.
(Operative part of the Order pronounced in the open Court on 10.02.10)
(Dr. CHITTARANJAN SATAPATHY) (JYOTI BALASUNDARAM)
TECHNICAL MEMBER VICE PRESIDENT
BB
4