2009 (4) TMI 965 - AT - Central Excise

Summary

Issues involved: Application for waiver of predeposit of CENVAT credit u/s 16,35,766/- for input services consumed at windmills.

In the judgment by Appellate Tribunal CESTAT CHENNAI, the issue revolved around the admissibility of CENVAT credit alleged to have been wrongly taken by the assessees during a specific period in relation to input services consumed at their windmills. The department contended that the credit was not admissible as the power generated by the windmill was supplied to the T.N.E.B. and drawn by the assessees from the T.N.E.B grid near the plant. The department's stance was that credit is only admissible if the power generated in windmills is directly drawn by the assessees.

The Tribunal referred to a recent decision in L.G. Balakrishnan & Bros. Ltd. Vs CCE Coimbatore, where predeposit of a similar amount confirmed on an identical issue was waived. This decision was made after considering a previous final order of the Tribunal in Rajans Metals (P) Ltd. Vs CCE Rajkot, which took a contrary view. The Tribunal noted that a prima facie case had been made out by the assessees based on the L.G. Balakrishnan order cited. Consequently, the Tribunal decided to waive the predeposit of the amounts in question and stayed the recovery pending the appeal.

This judgment highlights the importance of legal precedents and the interpretation of relevant laws and regulations in determining the admissibility of CENVAT credit in cases involving input services consumed at windmills.