Per C.N.B. Nair : The appellant M/s. SRF Limited has a few manufacturing units in and around Chennai, like at Manali Viralimalai and Gummidipoondi. In all these units excisable goods are manufactured. The appellant also avails Modvat credit in respect of inputs going into the manufacture.

2. The dispute in the present case is about part of the Modvat credit taken, on furnace oil going into the generation of electricity at the Manali unit. The furnace oil received in this unit is used in the generation of electricity. Part of the electricity so generated is used in the Manali unit itself and the remaining is wheeled out to the other manufacturing units of the appellant and is used in those units. The dispute is in relation to the Modvat credit taken on that portion of furnace oil which has gone into the manufacture of the electricity wheeled out to the other units and used in those units. The dispute is for the period March, 2002 to August, 2002.

3. The Revenue has taken a view that no credit could be availed in view of the definition of 'input' in Cenvat Rule 2 (g). The Rule reads as under:-

"(g) "input" means all goods, except high speed diesel oil and motor spirit, commonly known as petrol, used in or in relation to the manufacture of final products whether directly or indirectly and whether contained in the final product or not, and includes lubricating oils, greases, cutting oils, coolants, accessories of the final products cleared along with the final product, goods used as paint, or as packing material, or as fuel, or for generation of electricity or steam used for manufacture of final products or for any other purpose, within the factory of production". (emphasis supplied).

4. The finding is that, according to the definition, input includes only those goods used for generation of electricity used for manufacture of final products or for any other purpose within the factory of production. The impugned order has confirmed the view that since credit is dependent upon uses of electricity "within the factory of production" the inputs used in the generation of electricity which gets wheeled out to other units becomes ineligible. The impugned order has been passed relying on the decisions of this Tribunal in the case of National Organic Chemicals Vs. Collector, 1984 (17) ELT 465 and Ambalal Sarabhai Enterprises Ltd. Vs. Union of India, 1991 (54) ELT 30 (Gujarat), which considered the scope of the clause "used in the factory in which it is manufactured".

5. The appellant contends that the view taken by the authorities is erroneous for two reasons. The first contention is that this is a case of use "as fuel" and to such a case, the clause relating to use "for manufacture of final product within the factory of production" does not apply. This argument is on a plane reading of the definition clause. It is also being submitted that the Tribunal has held in the case of Ballarpur Industries Ltd., 2000 (36) RLT 537 (CEGAT-LB)=2000 (116) ELT 312 that fuel oil used in the generation of electricity is entitled to Modvat credit as goods used "as fuel". The second argument is that, even if it is treated as use for generation of electricity, use of such electricity in other units of the appellant would satisfy the requirement of "used for manufacture of final product or for any other purpose within the factory of production". It has been submitted that this contention remains accepted in the decision of this Tribunal in the case of Essar Steel Limited Vs. CCE, Surat-I - 2001 (45) RLT 102 (CEGAT-Mum.)=2001 (129) ELT 213. The learned Counsel has pointed out that in the case of Essar Steel, the input was used in one unit for generation of electricity and the electricity so generated was used in another unit for manufacture of final products and the Tribunal took the view that "the factory of production referred to in clause (d) is the factory of production not of electricity, but of final product". (wording of (g) is similar)

6. The learned DR