20 June 2014
A manufacturing unit used Furnace oil for the purpose of heat treatment of the material manufactured (Explosive item. It is a mandatory process under Explosive Rule, without which onward process should not be supposed). Here, Furnace oil burnt in a Furnace machine covered (inside) with Fire bricks and material get heat treatment in the machine. I think in this case, Furnace oil should come under consumable item and not under Power & fuel. Where, we should claim CENVAT and VAT credit on the Furnace oil. Please help.
20 June 2014
you can claim both cenvat and vat as input credit. and furnace oil is not the raw material it is power & fuel exp (direct exp.) due to its heat the furnace machine then raw material covert in finished goods.
CAclubindia
