Prakash Krishna, J. - (1.) THE present appeal has been filed under section 35G of Central Excise Act, 1944 against the order of CESTAT, New Delhi in Appeal Nos. E/3020/2006, E/3021/2006, E/3022/2006 with E/S/2443 to 2445/2006 whereby the appeal filed by the manufacturer in respect of claim for Modvat Credit on Furnace Oil and other eligible goods used in generator of electricity has been allowed. M/s. Jindal Polyster came into existence as factory manufacturing Partially Oriented Yarn and M/s. Jindal Polymer is manufacturing Polymer Chips.
(2.) M /s. Jindal Polyster (a division of M/s. Jindal Polyfilm Ltd.) was availing Cenvat Credit of duty paid on Furnace Oil which was used as fuel in the DG sets for generation of electricity. A team of Central Excise Officers, Noida visited the factory premises of Jindal Polyster on 10.12.2004. It was found that there were two manufacturing units having their registered factory premises adjacent to each other. One of such unit was registered under Central Excise in the name of M/s. Jindal Polymer having different Central Excise Registration number. Jindal Polymer was engaged in the manufacture of Polyster Yarn and Poly Propylene Filament Yarn while the other unit was engaged in the manufacture Polymer Chips. The final product i.e. Polymer Chips of Jindal Polymer is the main input of JP.
(3.) THE Department raised a dispute and rejected the contention of the respondents with regard to electricity generated through generation in Unit No. 1. The Department took the view that the respondent was not entitled to Modvat credit on the Furnace Oil used in the generation of the electricity consumed in the second unit. On appeal, the Tribunal held that this is neither in the interest of efficiency and economy nor is it mandated by Modvat Rules that the second unit is not entitled to Modvat credit on input of furnace oil used in the generator set.;