CENVAT credit available on inputs used in the production of electricity supplied to Sister Unit FOC

Last updated: 26 September 2022

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The CESTAT has ruled that CENVAT credit is available on inputs used to produce electricity that is supplied free of charge to a sister unit, provided that unit manufactures excisable goods. This decision came after the Revenue Department sought to recover credit on electricity supplied to a sister unit with a separate excise registration. The Tribunal upheld the Commissioner's order, stating that credit reversal is only required for electricity sold to external parties, not for internal transfers to related units.

Court :
CESTAT

Brief :
The CESTAT in Principal Commissioner v. M/s Hira Ferro Alloys Limited [Excise Appeal No. 53531 of 2018 with Excise Miscellaneous Application No. 50363 of 2019 dated September 6, 2022] held that the assessee is entitled to Central Value Added Tax("CENVAT") credit to the extent that the inputs are used for the production of electricity which is transferred free of cost to its sister unit for excisable goods.

Citation :
Excise Appeal No. 53531 of 2018 with Excise Miscellaneous Application No. 50363 of 2019 dated September 6, 2022

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1 Year PLAN

1999

(Excl. of GST ₹359)

2 Years PLAN

3499

(Excl. of GST ₹629)

BEST VALUE

3 Years PLAN

4999

(Excl. of GST ₹899)

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Judgement posted by

Bimal Jain

Service

FCA, FCS LLB with21 Yrs of Experience inTaxation Indirect and Direct: Education Qualification: B.Com (Hons) Chartered Accountants Company Secretary LLB Qualified SAP FI/CO Consultants Professional Membership: Chairmanof Indirect Tax Committee of PHD Chamber of Commerce Member of Indirec ... Read more

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