2019 (8) TMI 1292 - AT - Central Excise

CENVAT Credit - various input services which stands captively utilized by the respondent - Revenue s objection is that such services were utilized by the assessee not in their factory but in Renusagar Power Division of their factory, which was located far away from the factory premises. Whether Renusagar Power Division is required to be considered as captive power plant of the manufacturer or not? HELD THAT - Revenue in their memo of appeal is not disputing the fact that all the decision relied upon and referred to by the Adjudicating Authority have dealt with the issue in the same assessee s case. However, their only reason is that, all the said decision are in context of earlier cenvat credit rules, whereas the dispute in the present appeal is covered by subsequent cenvat credit rules - They have also made certain references to other decisions which are not exactly on the said issue for setting aside the impugned order. Further, Revenue has not refereed to any particular provisions of law in the subsequent cenvat credit Rules to establish that input services used for captive consumption stand excluded from the availability and admissibility of credit - All the earlier decisions discussed in the present impugned order of Commissioner, have held that M/s Renusagar Power Plant and M/s Hindalco Industries Ltd. are one integrated unit and the energy received from Renusagar power plant has to be treated as having been received from captive power plant. Appeal dismissed - decided against Revenue.

Summary

Issues:
1. Stay application rejection by Commissioner
2. Dispute regarding availment of cenvat credit on services
3. Consideration of Renusagar Power Division as captive power plant
4. Applicability of earlier decisions to subsequent cenvat credit rules

Analysis:
1. The Tribunal rejected the request for staying the Commissioner's order dropping the demand against the respondent. The appeal was decided based on precedent decisions, including those of the Supreme Court, as the issue was already covered.

2. The dispute revolved around the availment of cenvat credit on service tax paid for services captively utilized by the respondent. The Revenue objected to the services being used in Renusagar Power Division, located away from the factory premises, questioning whether it should be considered a captive power plant.

3. Previous decisions by the Tribunal, Delhi High Court, and the Supreme Court in the same assessee's case established that Renusagar Power Division should be treated as part of the manufacturer, allowing cenvat credit on input and input services used at the power plant. The Supreme Court held that M/s Hindalco Industries and Renusagar power plant should be seen as one entity, enabling the consumption of energy from its own source of generation.

4. The Revenue argued that previous decisions were based on earlier cenvat credit rules, while the present case fell under subsequent rules. However, they failed to cite specific provisions to exclude input services for captive consumption from credit availability. The Tribunal upheld the impugned order, citing consistency with earlier decisions and finding no reason to deviate from the established legal position.

In conclusion, the appeals filed by the Revenue, along with stay petitions, were rejected by the Tribunal, affirming the Commissioner's decision based on the settled legal principles regarding the treatment of Renusagar Power Division as a captive power plant.