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2016 (1) TMI 546 - AT - Service TaxCenvat credit - input services - installation and erection, maintenance or any other services rendered at Windmills - located away from the factory premises and the electricity generated out of such Windmills is consumed at the factory premises after such power is put through the common grid. - Held that - Hon ble Bombay High Court in the case of Endurance Technologies Pvt. Ltd. 2015 (6) TMI 82 - BOMBAY HIGH COURT held that Cenvat credit is eligible on maintenance or repair services of Windmills, located away from the factory. It is well settled that the decision of Hon ble High Court is binding on the Tribunal. It was pointed out at the time of hearing that the definition of input service credit was subsequently amended in 2011. We find that the present appeals are involving for the period 2006-2007 - Credit allowed - Decided in favor of assessee.
Issues Involved:
1. Eligibility of an assessee to avail Cenvat credit of Service Tax paid by service provider for services rendered at Windmills located away from factory premises. Analysis: 1. Eligibility of Cenvat Credit for Service Tax on Windmill Services: The issue revolved around whether an assessee could avail Cenvat credit for Service Tax paid by a service provider for services rendered at Windmills situated away from the factory premises. The Tribunal considered conflicting views expressed in previous cases and examined the case of M/s Parry Engineering & Electronics Pvt. Ltd. The appellant contended that the electricity generated by Windmills located at a distant site was transferred to their manufacturing unit for production. The Revenue argued against the eligibility of Cenvat credit, stating that the electricity generation site was far from the factory premises and the electricity itself was not excisable. The Adjudicating authority and Commissioner (Appeals) rejected the refund claim based on previous Tribunal decisions. The Tribunal noted the contradictory views in cases like Rajhans Metals Pvt. Ltd. and Endurance Technologies Pvt. Ltd., highlighting the differing interpretations regarding Cenvat credit for such services. 2. Interpretation of 'Input Service' for Cenvat Credit Eligibility: The Tribunal delved into the interpretation of 'input service' for Cenvat credit eligibility concerning services like management, maintenance, or repair of Windmills situated away from the factory premises. Citing precedents and legal provisions, the Tribunal emphasized the broad scope of 'input service' encompassing services directly or indirectly related to the manufacturing process. Referring to cases like Commissioner of Central Excise, Nagpur v. Ultratech Cement Ltd. and Deepak Fertilizers & Petrochemicals Corporation Ltd., the Tribunal highlighted the inclusive nature of the definition of 'input service.' The Tribunal affirmed that the services provided for Windmills installation and maintenance were integral to the manufacturing process, making the assessee eligible for Cenvat credit despite the service location being distant from the factory premises. 3. Precedential Value of High Court Decision on Cenvat Credit Eligibility: The Tribunal considered the decision of the Hon'ble Bombay High Court in the case of Endurance Technologies Pvt. Ltd., which upheld the eligibility of Cenvat credit for maintenance or repair services of Windmills located away from the factory premises. Emphasizing the binding nature of the High Court's decision on the Tribunal, the Tribunal concluded that the decision in the Endurance Technologies case correctly interpreted the law. Despite subsequent amendments to the definition of 'input service,' the Tribunal affirmed the correctness of the Endurance Technologies decision for the relevant period. Consequently, the Tribunal ruled in favor of the assessee based on the High Court's decision and directed the files to the regular Bench for further action. This detailed analysis of the judgment highlights the key legal issues, interpretations, and precedents considered by the Tribunal in resolving the controversy surrounding Cenvat credit eligibility for services related to Windmills located away from factory premises.
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