Excise duty on power generation
I have a small query in relation to excise duty.
A company has a cement manufacturing plant. It has also established a 25MW power generation plant for captive consumption of power in cement manufacture. However, current requirement of power for cement manufacture is only 15MW. So the company has set up a grid and is selling the balance 10MW power to government.
Now whether the excise duty will be applicable on this?
Further, the company has not shown the power division seperately in books. The company receives many services and pays the service tax. Whether the full service tax credit will be available for set off? If not, in what proportion, the credit will be disallowed.
On what context i may raise question on the treatment followed by company?