2016 (1) TMI 518 - AT - Central Excise

Cenvat Credit of input service on installation and erection of wind mills which are located far away from factory - Held that - there is no dispute that the electricity generated by the wind mill was used in the manufacture of the excisable goods, which was cleared on the payment of duty. - Credit allowed.

Summary

Issues:
- Eligibility of Cenvat Credit on input service in electricity generated by wind mills away from factory premises.
- Interpretation of previous judgments by Hon'ble Bombay High Court and Larger Bench of the Tribunal.
- Application of the doctrine of precedent in deciding the issue.
- Consideration of extended period demand of duty.

Analysis:
1. Eligibility of Cenvat Credit: The appellants claimed Cenvat Credit on input service for the electricity generated by wind mills located away from their factory premises. The Revenue contended that such credit was not permissible. The Tribunal referred to a decision by the Hon'ble Bombay High Court and a ruling by the Larger Bench, which favored the assessee's eligibility for the credit. The Tribunal noted that the electricity generated by the wind mills was used in manufacturing excisable goods, which were cleared on payment of duty. This usage supported the appellants' claim for Cenvat Credit.

2. Interpretation of Previous Judgments: The Tribunal considered the decision of the Hon'ble Bombay High Court in a similar case and the ruling of the Larger Bench on the issue at hand. The appellants argued that these decisions, along with a precedent from the Hon'ble Punjab and Haryana High Court, supported their position. The Tribunal emphasized the importance of following established precedents and held that there was no reason to deviate from the decisions of the higher courts and the Larger Bench.

3. Doctrine of Precedent: The Tribunal invoked the doctrine of precedent in its analysis, highlighting the necessity of adhering to previous judicial decisions. It cited cases where the Supreme Court emphasized the binding nature of its judgments on lower courts. By applying this doctrine, the Tribunal justified its alignment with the rulings of the Hon'ble High Court and the Larger Bench, reinforcing the consistency in legal interpretation.

4. Extended Period Demand: The appellants raised a concern regarding the demand of duty for an extended period. However, the Tribunal, having found in favor of the appellants on the substantive issue of Cenvat Credit eligibility, deemed it unnecessary to delve into the limitation aspect. The Tribunal concluded that the appeals should be allowed on merit, leading to the setting aside of the impugned orders and the allowance of the appeals filed by the appellants.

In summary, the judgment addressed the eligibility of Cenvat Credit for input service related to electricity generated by wind mills away from factory premises, interpreting previous judgments, applying the doctrine of precedent, and deciding on the extended period demand of duty. The Tribunal's decision favored the appellants based on the usage of electricity in manufacturing excisable goods and the consistency with higher court rulings and established legal principles.