9911796707
|
Home
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2024 (1) TMI 1157 - AT - Central ExciseCENVAT Credit - input services or not - services related to effluent treatment of the waste generated at the appellant s factory and such effluent treatment service availed from the third party agency i.e. Bharuch Enviro Infrastructure Ltd., Ankhleshwar (BEIL) - HELD THAT - As per the pollution control act, it is mandatory for every industrial unit to treat the effluent waste generated during the manufacture of final product, therefore, the industrial unit cannot carry out the production without compliance of pollution control norms which includes effluent treatment of waste generated during the manufacturing activity. Therefore, the effluent treatment of waste is necessary for overall manufacturing activity of the industrial unit. This issue has been considered in the various judgments - reliance can be placed in INDIAN FARMERS FERTILISER COOP. LTD. VERSUS CCE., AHMEDABAD 1996 (7) TMI 141 - SUPREME COURT where it was held that The apparatus used for such treatment of effluents in a plant manufacturing a particular end-product is part and parcel of the manufacturing process of that end-product. The ammonia used in the treatment of effluents from the urea plant of the appellants has, therefore, to be held to be used in the manufacture of urea and the raw naphtha used in the manufacture of such ammonia to be entitled to the said exemption. The revenue s claim that since the service was availed beyond the place of removal, credit is not admissible completely fails and, on that ground, credit cannot be denied. The appellant is legally entitled for availment of Cenvat credit in respect of effluent treatment service - the impugned order is set aside - Appeals are allowed.
Issues Involved:
1. Entitlement of Cenvat credit on services related to effluent treatment of waste generated at the appellant's factory. 2. Whether the effluent treatment service availed beyond the place of removal affects the admissibility of Cenvat credit. Summary: Issue 1: Entitlement of Cenvat Credit on Effluent Treatment Services The primary issue in this case is whether the appellant is entitled to Cenvat credit for services related to the effluent treatment of waste generated at their factory, which was availed from a third-party agency, BEIL. The appellant's counsel argued that the issue is no longer res-integra, citing various judgments that support the admissibility of such services as input services eligible for Cenvat credit. The Tribunal reviewed multiple precedents, including: - Indian Farmers Fertilizer Cooperative Ltd vs. Collector: The Supreme Court held that effluent treatment is an essential and integral part of the manufacturing process, and the apparatus used for such treatment is part and parcel of the manufacturing process of the end-product. - Cheminova India Ltd vs. CCE & ST, Surat-II: The Tribunal held that even though effluent treatment is not directly connected to the manufacture of the final product, it is mandatory under pollution control laws, making it a vital part of the overall manufacturing process. - Wipro Enterprises (P) Ltd vs. Commissioner of GST & Central Excise: The Tribunal allowed Cenvat credit for water treatment services, considering them necessary as per pollution control norms. - Anar Chemicals Pvt. Ltd vs. CCE: The Tribunal held that services availed for maintaining an effluent treatment plant are admissible input services. Based on these judgments, the Tribunal concluded that services related to effluent treatment are essential for the overall manufacturing activity and thus qualify as input services eligible for Cenvat credit. Issue 2: Effluent Treatment Services Beyond the Place of Removal The Revenue contended that since the effluent treatment services were availed beyond the place of removal, the credit should not be admissible. However, the Tribunal referred to the judgment in Deepak Fertilizers & Petrochemicals Corpn. Ltd vs. C.C.Ex., Belapur, where it was held that input services used by the manufacturer, whether directly or indirectly, in or in relation to the manufacture of final products, are eligible for credit, regardless of their location. The Tribunal also cited other relevant cases: - C.C.E & Cus., Aurangabad vs. Endurance Technology Pvt Ltd - Huhtamaki PPL Ltd vs. Commissioner of C.Ex. & ST., Surat -I - Commr. Of C. Ex., Vadodara - II vs. Siemens Healthcare Diagnostics Ltd These judgments reinforced that the location of the service does not affect the admissibility of Cenvat credit if the service is used in or in relation to the manufacture of final products. Conclusion: The Tribunal set aside the impugned order and allowed the appeals, affirming that the appellant is legally entitled to avail Cenvat credit for effluent treatment services.
|
