captive consumption

krishna iyer (Sr.Finance Manager) (197 Points)

19 January 2011  

we manufacture electiricy in our own Captive Power Plant using fuel.    A small portion of electricity is given to contractors who are carrying out various jobs inside factory.     inputs used for electiricity generation is duty-exempt , under captive consumption.  But dept view electricity supply to contractors are not captive consumption(used in manufacture of products) and therefore duty is payable on inputs proportionate to electricity supply to contractors.

 

kindly advise how to proceed