2020 (8) TMI 1 - AT - Central Excise

CENVAT Credit - input services - services utilised in the factory of production - Road work over jarofix yard site - De- sludging of sludge sand - Installation of speed breaker - Electrification work at Jarofix yard site canteen building in CISF colony - Installation of deep irrigation system - Drain repairing - Tree washing and washing of common area road - Watering of plant - Levelling and dressing of plantation - Monsoon shed for storage of chemicals and WIP during rainy season - AMC for plant machinery, security services at main gate, laying cable work at CISF colony, etc. HELD THAT - The appellant is entitled to cenvat credit on all the items of input services in dispute, as the same has been received and utilised in the factory of production allowable under Rule 2(l) of Cenvat Credit Rules, 2004. Appeal allowed - decided in favor of appellant.

Summary

Issues Involved:
Allowability of cenvat credit on various services utilized in the factory of production.

Analysis:
The appellant sought cenvat credit on services used in the factory of production, including road work, de-sludging, installation of speed breaker, electrification work, installation of irrigation system, drain repairing, tree washing, watering of plants, levelling of plantation, monsoon shed construction, and various other services related to maintenance, security, and repair. The appellant argued that all these services were essential for managing environmental compliance, maintaining greenery, ensuring safety and security, and facilitating production activities. The counsel relied on relevant case laws to support the claim.

The Revenue, represented by the Authorised Representative, opposed the appellant's claim, relying on the impugned order that denied the cenvat credit on the disputed services.

After hearing both parties, the Hon'ble Member (Judicial) analyzed the facts and contentions. The Member noted that the appellant was engaged in mining and beneficiation activities related to zinc production, involving the generation and proper disposal of hazardous waste as per environmental norms. The services in question were utilized within the factory premises for various purposes, such as managing environmental compliance, maintaining greenery, ensuring safety, and facilitating production activities. The Member found that all the disputed services were directly or indirectly related to the manufacturing process and fell within the ambit of Rule 2(l) of the Cenvat Credit Rules, 2004. Therefore, the Member held that the appellant was entitled to cenvat credit on all the input services in dispute. Consequently, the impugned order was set aside, and the appeal was allowed, granting the appellant consequential benefits as per the law.

In conclusion, the judgment favored the appellant's claim for cenvat credit on the services utilized in the factory of production, emphasizing the direct or indirect relationship of the services with the manufacturing activities and compliance requirements.