9911796707
TMI Blog2018 (12) TMI 372X X X X Extracts X X X X X X X X Extracts X X X X ..... zinc cathode and sulphuric acid and even availed cenvat credit of these service tax. Department during the audit of the Company's record for the period w.e.f. March 2012 to June, 2012, July 2012 to November 2012 and January 2013 to September 2013 have observed that the appellants are availing cenvat credit of service tax on the services used for construction of secured landfill and jarofix storage pond and other allied works for disposal of industrial waste and polluted water. Department holding that these services are not the input service due to no nexus with the manufacture and clearance of the final product of appellant alleged that the cenvat credit availed by the appellant amounting to Rs. 17,68,674/-, Rs. 12,92,931/- and Rs. 17,59,151/- for the period as above respectively. Resultantly, the SCNs dated 06.03.2013, 01.08.2013 and 20.01.2014 respectively were issued to the appellants. Proposing the recovery of the aforesaid amount of cenvat credit availed by them alongwith the interest on the appropriate rate and the proportionate penalties. Three of these SCNs were initially adjudicated vide Joint Commissioner vide its Order No. 5-7 dated 19.01.2015 vide which the entire propo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oner on the same issue, the Commissioner has committed error while ignoring the exclusion part of the definition of inputs and has committed error while holding this construction as an integral part of the process of the manufacture. Resultantly, the Appeal of the assessee is prayed to be dismissed and that of Department is prayed to be allowed. 6. After hearing both the parties, my opinion is as follows:- The moot question to be decided is as to whether the cenvat credit on services used for construction of secured landfill and jarofix storage pond and allied works for disposal of industrial waste and polluted water is admissible to the asseesse who otherwise is engaged in manufacture of lead and zinc concentrates, zinc cathode and sulphuric acid. For the purpose the definition of input services in Section 2(l) is relevant, the same reads as follows:- As per Rule 2(l) of the Credit Rules, "input service" means any service - (i) Used by a provider of taxable service for providing an output service; or (ii) Used by the manufacturer, whether directly or indirectly, in or in relation to the final products and clearance of final products upto the place of removal, And included s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s. Sales Tax Officer, Kanpur 1991 (91) ELT 34 has held that: "The expression "in the manufacture of goods" should normally encompass the entire process carried on by the dealer of converting raw materials into finished goods. Where any particular process is so integrally connected with the ultimate production of goods that but for that process, manufacture or processing of goods would be commercially inexpedient, goods required in that process, would, in our judgment, fall within the expression "in the manufacture of goods." In that case Hon'ble Apex court even went to the extent of holding that: the use of electrical equipments, like lighting, electrical humidifiers, exhaust fan etc. were also taken to be necessary equipment, to effectively carry on the manufacturing process. This was the observation of the Hon'ble Apex court even at the time when scope of definition of input was very restricted. Further, we observe that even prior to this, in the case of Collector of Central Excise Calcutta Vs. East and Paper Industries Ltd. 1989 (43) ELT 201 the Hon'ble Apex Court has held, "Where any particular process is so integrally connected with the ultimate production of goods that, but ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ngerous properties. 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. 9. For the present case, it is an undisputed fact that the cenvat credit is taken by the assesse on the services used for construction of secured landfill i.e. for stabilisation of hazardous waste as that of jarofix being a toxic affluent. Since the activity is for securing the landfill from which the final product has to be extracted it is definitely the part and parcel of their manufacturing activity i.e. of extraction of lead and zinc from these mines. Otherwise also this construction is meant for disposal of industrial waste i.e. it is an activity of pollution control and as such is statutory requirement for any manufacturing unit generating waste. To my opinion this activity is essential, though indirectly, for the manufacture of final product o ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
