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TMI Blog2019 (1) TMI 430X X X X Extracts X X X X X X X X Extracts X X X X ..... l"). The order impugned is a common order in a batch of appeals, which has been followed in the order impugned in C.M.A.No.470 of 2017. 4.The learned counsels for the parties submit that the substantial questions of law, as framed in C.M.A.No.352 of 2016, may be taken up for consideration. 5.The appeal, viz., C.M.A.No.352 of 2016 was admitted, vide order dated 04.03.2016, on the following substantial questions of law:- "(i) Whether on the facts and circumstances of the case, the Customs, Excise and Service Tax Appellate Tribunal is correct in holding that the services received in respect of lease rentals and operations and maintenance of windmill situated far away from the factory are entitled for CENVAT Credit under Rule 2(l) of the CENVAT Credit Rules, 2004? (ii) Whether the Customs, Excise and Service Tax Appellate Tribunal is correct in allowing credit on the service tax paid on lease rentals and operations and maintenance charges of windmills situated outside the factory premises of the assessee and the electricity generated is supplied to TNEB Grid and there is no nexus between the process of electricity generated at the windmills and in the manufacture of final product ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sed the fact of availment of Cenvat credit on the service tax paid on lease rentals, operations and maintenance charges of windmills, which do not come under the purview of "input services" under Rule 2(l)(ii) of the Rules. Accordingly, they were called upon to show cause as to why Cenvat credit on service tax, availed by them, under the said head, should not be demanded; why interest should not be levied; and why penalty should not be imposed. 7.The assessee submitted their objections discussing about the importance of wind energy in the State, the necessity to locate the windmills outside the factory area, etc. The assessee also referred to the agreement entered into with the TNEB and stated that those agreements were entered into only for the purpose of utilizing the power generated by windmills for consumption at the factory in the manufacturing locations, which are connected through TNEB's power grid/high tension supply lines. Further, the assessee stated that the unutilised surplus power is taken by the TNEB and they could not sell the surplus power to third parties. Further, by referring to the terms of the agreement, it was stated that the agreement envisages generati ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... transaction done by the assessee. Further, the Tribunal recorded a factual finding that in the absence of any material on record showing energy generated by windmills was used for the purpose other than manufacture or providing of service, all the appeals were allowed. The Tribunal also set aside the interest levied and the penalty imposed. 10.We have heard Mr.A.P.Srinivas, learned Senior Standing Counsel for the appellant/Revenue, Mr.P.R.Renganath, learned counsel for M/s.Ashok Leyland Ltd., and M/s.L.Maithili, learned counsel appearing for M/s.ITC Ltd. 11.The Tribunal in the impugned order has followed the decision of the High Court of Bombay in Endurance Technology Pvt. Ltd., (supra). The said decision has attained finality, as the Revenue has not preferred any appeal, and it appears that refund was also granted to the said assessee. Therefore, the decision would bind the Department. Nevertheless we heard Mr.A.P.Srinivas, for a considerable length of time. 12.The argument of the learned counsel is that the windmill is situated far away from the manufacturing plant, there is no nexus and the type of transaction between the assessee and the TNEB is a barter system and it is, i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mulated. The substantial questions of law formulated in these appeals stem out of the case, which were taken for adjudication, which especially involve factual details. Therefore, we are not persuaded by the contentions raised by Mr.A.P.Srinivas to travel beyond the allegation made in the show cause notice against the assessee. If that is to be done, then it would not only amount to an exercise being without jurisdiction, but it would also violate the principles of natural justice. Furthermore, this would expand the scope of the allegation against the assessee, which cannot be done at this stage. Therefore, we will have to answer the substantial questions of law framed for consideration on the allegations, which were set out against the assessee in the show cause notice. 16.As pointed out earlier, the adjudicating authority did not dispute the fact that the assessee had drawn equal quantity of electricity from the TNEB grid equivalent to the amount which it had generated through windmills and supplied to the TNEB. Therefore, we are not required to go into the question as to whether there was any excess energy generated, whether it was sold to third parties or whether the assessee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ourt referred to the decisions of the High Court of Bombay in the case of Commissioner of Central Excise, Nagpur vs. Ultratech Cement, 2010 (20) S.T.R.589 (Bom.); Commissioner of Central Excise, Nagpur vs. Ultratech Cement Ltd., 2010 (260) E.L.T. 369 (Bom.); and Deepak Fertilizers & Petrochemicals Corporation Ltd. vs. C.C.Ex. Belapur, 2013 (32) S.T.R. 532 (Bom.). The Hon'ble Supreme Court, after taking note of the relevant rules, held that it becomes clear that management, maintenance and repair of windmills installed by the respondents is input service as defined in Clause I of Rule 2. It was held that Rules 3 and 4 provide that any input or capital goods received in the factory or any input service received for manufacture of final product would be susceptible to Cenvat credit. Further, it was held that Rule does not say that input service received by a manufacturer must be received at the factory premises and the decisions relied on also interpret the word "input service" in similar fashion. 19.Further, by referring to the decision in Commissioner of Central Excise, Nagpur vs. Ultratech Cement, 2010 (20) S.T.R.589 (Bom.) (supra), it was held that the definition of "input se ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sed in relation to business of manufacture of final product. The expression "activities" in relation to business is also discussed in this judgment by referring to judgment of Apex Court. In the case of Deepak Fertilizers & Petrochemcals Corporation Ltd. v. C.C.Ex. Belapur [cited supra] the Division Bench held as under : "The definition of the expression 'input service' covers any services used by the manufacturer, whether directly or indirectly, in or in relation to the manufacture of final products. The words 'directly or indirectly' and 'in or in relation to' are words of width and amplitude. The subordinate legislation has advisedly used a broad and comprehensive expression while defining the expression 'input service'. Rule 2(l) initially provides that input service means any services of the description falling in subclauses (i) and (ii). Rule 2(l) then provides an inclusive definition by enumerating certain specified services. Among those services are services pertaining to the procurement of inputs and inward transportation of inputs. The Tribunal, proceeded to interpret the inclusive part of the definition and held that the Legislatur ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... es were directly or indirectly in or in relation to the manufacture of final products. 22.The decision in the case of Endurance Technology Pvt. Ltd. (supra) was followed by a Larger Bench of the Tribunal, in the case of Parry Engg. & Electronics P. Ltd. vs. C.C.E. & S.T., Ahmedabad-I, II, III, 2015 (40) S.T.R. 243 (Tri. - LB). 23.We are informed that there is a Larger Bench's decision of the Tribunal, which also has not been appealed and the said decision has attained finality. 24.The decision in the case of Maruti Suzuki Ltd. (supra) cannot be applied to the facts of the present case, as it was a case where the Court was considering as to whether electricity can be construed as an input. The facts in the case would be very important because, the allegation against the assessee therein was that they had generated electricity in their factory and wheeled out portion of the electricity to its joint ventures and the question was whether the extent of the clearance of excess electricity outside the factory to the joint ventures, vendors, grid etc., would be admissible for Cenvat credit, as it is cleared for a price. This question was answered against the assessee. However, the f ..... X X X X Extracts X X X X X X X X Extracts X X X X
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