Customs, Excise and Gold Tribunal - Delhi
Commissioner Of C. Ex. vs Leader Engineering Works on 26 February, 1998
Equivalent citations: 1998(101)ELT666(TRI-DEL)
ORDER S.S. Kang, Member (J)
1. The Revenue filed this appeal against the order-in-appeal passed by the Commr. (Appeals), Central Excise, Chandigarh. In the impugned order, the Commr. (Appeals) held that diesel oil which is used in the manufacture of final product, the Modvat credit on such light diesel oil is admissible and when it is used in the generation of electricity in the generating set, the Modvat credit is not available on such light diesel oil.
2. The respondent made written submissions vide their letter dated 21-2-1998 and relied upon the decision of the Tribunal in the case of C.C.E., Chandigarh v. Leader Engg. Works (Final Order No. A/2306-15/96-NB, dated 24-9-1996) [1997 (92) E.L.T. 557 (Tribunal)]. In the circumstances, the appeal is being taken up in the absence of the respondent.
3. Heard Shri Sanjiv Srivastava, JDR on behalf of the Revenue. Shri Srivastava submits that in this case, the adjudicating authority specifically held that light diesel oil is used in the generation for generating electricity and this fact was admitted by the respondent. He further submits that the benefit of Modvat credit in respect of light diesel oil is denied to the respondent as he is using this oil in the generating set for generation of electricity. He relied upon the decision of the Tribunal in the case of Ferro Alloys Corporation Ltd. v. C.C.E., Visakhapatnam reported in 1997 (20) RLT 778 (Tribunal). He therefore, prays that the appeal be allowed.
4. In this case, the Revenue filed this appeal only on the ground that Modvat credit is not available in respect of light diesel oil used for generation of power. The Tribunal in the case of Ferro Alloys Corporation Ltd. v. C.C.E. (supra) held that oil and furnace oil used as fuel oil for captive generation of electricity are not eligible as inputs under Rule 57A of the Central Excise Rules, 1944, hence the benefit of Modvat credit is not available in respect of such oils.
5. The respondent relied upon the decision of the Tribunal in the case of C.C.E., Chandigarh v. Leader Engg. Works vide Final Order No. A/2306- 15/96-NB, dated 24-9-1996 [1997 (92) E.L.T. 557 (Tribunal)] and in this case, the dispute is regarding the eligibility of Modvat credit in respect of foundry fluxes chemicals which are used for preparation of moulds whereas in the present case, the dispute is regarding the eligibility of Modvat credit on light diesel oil used for generation of electricity hence the facts of the case relied upon by the respondents are not applicable in the present case.
6. In the present case the adjudicating authority specifically held that respondents are using light diesel oil in generator for generating electricity and this fact was admitted by the respondents. The issue is fully covered by the decision of the Tribunal in the case of Ferro Alloys Corporation Ltd. v. C.C.E. (supra).
Consequentially, the impugned order is set aside and the appeal is allowed. .