2016 (11) TMI 39 - AT - Central Excise

Whether the appellant is eligible to avail CENVAT credit of service tax paid on services like erection commissioning and installation and the capital goods used for the wind mills which are situated far away from the factory - Held that - the said electricity generated by the windmills is fed to the Grid of State Electricity Board. Appellant got equivalent quantity of electricity from Grid after minor adjustment as per the terms and conditions entered between the appellant and the Electricity Board - Hon ble High Court of Bombay in the case of Commissioner of Central Excise v. Endurance Technology Pvt. Ltd. 2011 (7) TMI 373 - CESTAT MUMBAI is directly on the point of availment of CENVAT credit on the wind mills hence the case directly on the issue is being considered by me for disposing of the appeals.

Summary

Issues:
- Eligibility of appellant to avail CENVAT credit of service tax paid on services like erection, commissioning, and installation, and capital goods used for wind mills situated far away from the factory premises.

Analysis:
- The issue in this case revolves around the eligibility of the appellant to claim CENVAT credit on service tax paid for services and capital goods used for wind mills located away from the factory. The Revenue contends that the credit was incorrectly availed as the wind mills and associated services were not directly related to the manufacture of final products.

- The appellant's Counsel argues that previous Tribunal decisions and High Court rulings support their position. They cite cases such as Maharashtra Seamless Ltd., Endurance Technologies P. Ltd., and Parry Engg. & Electronics P. Ltd. to assert that the issue has been settled in favor of the assessee.

- Regarding CENVAT credit on capital goods, the appellant relies on the Tribunal's decision in Aluminum Powder Co. Ltd. and the High Court of Rajasthan's ruling in Hindustan Zinc Ltd. to support their claim.

- The Revenue argues that wind mills are not considered capital goods, and therefore, the appellant should not be eligible for input service tax credit on such services. They refer to the High Court of Bombay's decision in the case of Vodafone India Ltd. to support their stance.

- After considering both sides' submissions, the Member (Judicial) finds that the lower authorities erred in denying CENVAT credit to the appellant. The electricity generated by the wind mills is fed to the State Electricity Board's grid, and the appellant receives an equivalent quantity of electricity from the grid. The Member cites the judgment of the High Court of Bombay in the case of Endurance Technology Pvt. Ltd. and the Tribunal's decision in Parry Engg. & Electronics P. Ltd. to support the appellant's claim.

- The Member also upholds the appellant's right to claim CENVAT credit on capital goods used for wind mills based on the Tribunal's decision in Aluminum Powder Co. Ltd. The High Court's ruling in the case of Commissioner of Central Excise v. Endurance Technology Pvt. Ltd. further supports the appellant's position.

- Ultimately, the impugned orders are set aside, and the appeals are allowed in favor of the appellant, with consequential relief granted if applicable.