2021 (9) TMI 1193 - AT - Central Excise

CENVAT Credit - input services - Outward transportation of Hazardous Waste - waste transported from the factory to the M/S Satyen Flourine Industires and Gujarat Paper Mills Association who is supposed to handle the Hazardous waste - transportation cost for disposal of Hazardous waste, borne by the appellant as per the clause in the tri- parte agreement - HELD THAT - Both the Lower Authorities have denied the Cenvat Credit on Outward Transportation of Hazardous waste relying on Hon ble Supreme Court Judgment in the case of the COMMISSIONER OF CENTRAL EXCISE SERVICE TAX VERSUS ULTRA TECH CEMENT LTD. 2018 (2) TMI 117 - SUPREME COURT - However, in the present case the facts are entirely different, as in Ultratech judgment the fact was removal of Excisable Goods and payment of duty however, in the present case the disposal of Hazardous waste is as per the requirement of Gujarat Pollution Control Board and the cost of transportation for disposal of such waste is borne by the appellant. In fact this activity is though the way of transportation but it is the disposal of Hazardous waste which is generating during the course of manufacture. In this fact the service of transportation is covered under the main clause of dentition provided under Rule 2(l) of Cenvat Credit Rules, 2004. Therefore, the judgment of ultratech of the Apex Court is not at all relevant in the facts of the present case. Even though it is a transportation service, but in respect of disposal of Hazardous waste that is the activity related to manufacturing, it is covered under input services definition - the credit is admissible - appeal allowed - decided in favor of appellant.

Summary

Issues: Entitlement to Cenvat credit for outward transportation of Hazardous Waste.

Analysis:
The issue in the judgment revolves around whether the appellant is entitled to Cenvat credit for the outward transportation of Hazardous Waste. The appellant bore the transportation cost for the disposal of Hazardous waste as per a tri-partite agreement. The appellant argued that the denial of credit by the lower authorities was based on a Supreme Court judgment in a different context. The appellant contended that the disposal of Hazardous waste was a mandatory requirement under the Gujarat Pollution Control Board and was related to the manufacturing activity. The appellant relied on a CESTAT judgment in a similar case to support their claim.

The lower authorities had denied the Cenvat Credit based on a Supreme Court judgment related to the removal of excisable goods and payment of duty. However, the Tribunal found the facts of the present case to be different. In this case, the disposal of Hazardous waste was a requirement of the Gujarat Pollution Control Board, and the transportation cost was borne by the appellant. The Tribunal emphasized that this activity was part of the manufacturing process, and the transportation service was covered under the definition of input services. The Tribunal cited a previous judgment involving the disposal of Hazardous waste to support their decision.

In light of the previous judgment and the specific circumstances of the case, the Tribunal set aside the impugned order and allowed the appeal. The Tribunal concluded that even though it was a transportation service, the disposal of Hazardous waste was an activity directly related to manufacturing, making it eligible for Cenvat credit. The judgment highlights the importance of considering the specific facts and legal context of each case when determining the eligibility for Cenvat credit in similar situations.