2018 (3) TMI 102 - AT - Central Excise

CENVAT credit - various input services related to dumping of waste- denial on the ground of nexus - Held that - as the waste which arises during the course of manufacture of the final product is required to be dumped by the appellant. Without dumping the waste, no further manufacturing activity can take place and it is essential to dump the said waste as per the direction of Pollution Control Board - although said service has been availed by the appellant post manufacturing, but the same is an integral part of their manufacturing activity - credit allowed - decided in favor of appellant.

Summary

Issues:
Denial of Cenvat credit on various services availed by the appellant for the period July 2012 to Sept. 2015 on the ground that these services are not input services as per Rule 2(l) of the Cenvat Credit Rules, 2004.

Analysis:
1. The appellant filed two appeals against the impugned order denying Cenvat credit on services availed from July 2012 to Sept. 2015, stating they are not input services as per Rule 2(l) of the Cenvat Credit Rules, 2004.

2. The adjudicating authority contended that the services lacked nexus with the manufacturing activity and were excluded as input services post-1.4.2011. The appellant challenged this, emphasizing the services' relevance to their manufacturing process.

3. Dismantling and removal of old AC/CGI Sheets/GI gutters/Louvers: The Tribunal held that such activities were essential for plant repair and maintenance, entitling the appellant to Cenvat credit. A previous case supported this view.

4. Strengthening of steel structures, cleaning, fabrication, and erection: Despite being denied initially, the Tribunal ruled in favor of the appellant, recognizing the nature of the work as repair and maintenance, not new construction.

5. Hiring of JCB/PCB Dozer, Grader: The Tribunal justified allowing Cenvat credit for these services as they directly contributed to the manufacturing activity by preparing land for mining, a crucial step in the production process.

6. Fabrication and erection work at Tailing dam, pump fixing, Installation/fabrication work of paste fill pipeline plant: Cenvat credit was approved for these activities, even though they occurred post-manufacturing, as they were deemed integral to the manufacturing process.

7. The Tribunal concluded that waste disposal post-manufacturing was a necessary part of the manufacturing activity, warranting Cenvat credit approval despite occurring after the manufacturing process.

8. Ultimately, the Tribunal ruled in favor of the appellant, allowing the Cenvat credit in dispute and setting aside the impugned order, granting consequential relief.