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TMI Blog2023 (10) TMI 1085X X X X Extracts X X X X X X X X Extracts X X X X ..... dated that High COD and Low TDS effluents shall be sent to BEIL,a GPCB controlled site for proper treatment and disposal of the waste. It is his submission that the treatment of the waste arising out of the manufacture is mandatory as per the Gujarat Pollution Control Board and without complying the order of the GPCB regarding treatment of factory waste, the appellant cannot carry out their manufacturing activity, therefore, the effluent treatment service received by the appellant is in or in relation to manufacture of final product and the same is admissible input service and credit must be allowed. He placed reliance on the following judgments: * Cheminova India Ltd. Final order dated 28.06.2023 * Kanoria Chemicals & Industries Ltd. 2015 (7) TMI 970 CESTAT (AHM) * Wipro Enterprises (P Ltd. 2018 (12) TMI 1167 CESTAT Chennai * Anar Chemicals Pvt. Ltd. 2011 (24) STR 32 * Indian Farmer Fertiliser Cooperative Ltd 1996 (86) ELT 177 (SC) * UOI vs Hindustan Zinc Ltd 2019 (367) ELT 616 (Raj.) * CCE vs Eastend Paper Industries Ltd. 1989 (43) RLT 201 (SC) * Deepak Fertilizers & Petrochemicals Corpn. Ltd. 2013 (32) STR 532 (Bom.) 3. On the other hand, Shri R.R. Kurup, Learne ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e of the judgments are cited below:- In case of M/S KANORIA CHEMICALS & INDUSTRES LTD (supra) this tribunal dealt with the similar fact and passed the following order:- 4. Heard both the sides and perused the case records. The issue involved in the present appeal is whether certain pollution control services availed by the appellant are eligible to CENVAT Credit under CENVAT Credit Rules 2004 or not. Revenue filed this appeal on the ground that the activities in relation to business have been deleted from the definition of input services during the relevant period. It is observed from the permissions granted by Gujarat Pollution Control Board under The Water (Prevention And Control of Pollution) Act, 1974, that Appellant was required to maintain certain standards of effluent from Appellants factory as a mandatory and statutory necessity. When the activity is required to be done mandatorily under a statutory obligation, then it cannot be said that the same is not in relation to the manufacture of finished goods in Appellants factory. This principle was settled by Honble Supreme Court in the case of Indian Farmers Fertilizer Co-op. Ltd Vs CCE Ahmedabad (supra), where duty free ra ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eeping and Landscaping Services were entitled to CENVAT Credit of service tax paid on them. In the light of the discussions made hereinabove, I am of the view that the appellant has rightly availed Credit on Water Treatment Service and Garden Maintenance Service for which reason I set aside the demand raised on this count. 10. To sum up: (i) Demand on Rent-a-Cab Service for the period from April 2008 to March 2009 is set aside; (ii) Demand on Rent-a-Cab Service for the period from December 2011 to October 2012 is upheld with interest thereon; (iii) The demand raised on Water Treatment Service and Garden Maintenance Service for the period January 2015 to December 2015 is set aside; 11. The appeals are partly allowed on the above terms. Similarly, in the case of ANAR CHEMICALS PVT. LTD. 2011 (24) S.T.R. 32 (TRI. - AHMD.) this bench of the tribunal on the maintenance service of effluent treatment plant allowed the cenvat credit, the relevant order is as under:- 2. The Hon'ble Supreme Court in the case of Indian Farmers Fertilizer Cooperative Ltd. referred supra, has held that pollution control aparatus/device used in plant are to be treated as part and parcel of manufactur ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... peals) to decide the said issues afresh after taking note of various decisions of the Tribunal relied upon by the appellant before me. 4. In view of the above, the demand of Rs. 1,01,797/- (Rupees One Lakh, One Thousand, Seven Hundreds and Ninety Seven Only) along with interest and penalty of identical amount is set aside. In respect of other issues, the matter is remanded to Commissioner (Appeals), for fresh consideration. 5. The appeal is disposed off in above manner. The similar issue related to effluent treatment plan has been dealt with in detail by the Hon'ble Supreme Court in the case of INDIAN FARMERS FERTLIZERS CO-OPERATIVE LTD 1996 (86) ELT 177 (SC) wherein, the Hon'ble Apex Court expressed the following issue:- 7. Emphasis was laid, and rightly, by learned counsel for the appellants on the phraseology used in the manufacture of ammonia provided such ammonia is used elsewhere in the manufacture of fertilisers. That the raw naphtha is used to make ammonia is unquestioned. The ammonia is used directly in the manufacture of fertilisers; the raw naphtha so used is, it is not disputed, eligible to the exemption. The question is whether the ammonia used in the off-site pl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t parts any goods (inputs) falling under Item 68 of the First Schedule to the Act from so much of the excise duty leviable thereon as was equivalent to the excise duty paid on the inputs. The Court quoted what had been said in Dy. CST v. Thomas Stephen & Co. Ltd., namely, "Consumption must be in the manufacture as raw material or of other components which go into the making of the end-product ........." and observed that, correctly apprehended, that statement did not lend itself to the understanding that for something to qualify itself as a raw material it had necessarily and in all cases to go into and be found in the end-product. The court also quoted with approval the case of Eastend Paper Industries Limited cited above. 9. That leaves us to consider whether the raw naphtha used to produce the ammonia which is used in the effluent treatment plant is eligible for the said exemption. It is too late in the day to take the view that the treatment of effluents from a plant is not an essential and integral part of the process of manufacture in the plant. The emphasis that has rightly been laid in recent years upon the environment and pollution control requires that all plants which ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in the case of Indian Farmers Fertilizer Co-op. Ltd Vs CCE Ahmedabad (supra), where duty free raw material Naptha used for effluent treatment plant, was held to be eligible for exemption. Para 9 of this case law is relevant and is reproduced below:- "9. That leaves us to consider whether the raw? naphtha used to produce the ammonia which is used in the effluent treatment plant is eligible for the said exemption. It is too late in the day to take the view that the treatment of effluents from a plant is not an essential and integral part of the process of manufacture in the plant. The emphasis that has rightly been laid in recent years upon the environment and pollution control requires that all plants which emit effluents should be so equipped as to rid the effluents of dangerous 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the manufacture of fertilisers. It requires only that the ammonia should be used in the manufacture of fertilisers. The Exemption Notification must be so construed as to give due weight to the liberal language it uses. The ammonia used in the water treatment, steam generation and inert gas generation plants, which are a necessary part of the process of manufacturing urea, must, therefore, be held to be used in the manufacture of ammonia and the raw naphtha used for the manufacture thereof is entitled to the duty exemption. 8. For our conclusion we draw support from the judgment of this Court in Collector of Central Excise, Calcutta-II v. Eastend Paper Industries Ltd. - 1989 (43) E.L.T. 201 = 1989 (4) SCC 244, where it was held, "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, articles required in that process, would fall within the expression in the manufacture of goods". This was a reiteration of the view expressed in M/s. J.K. Cotton Spinning & Weaving Mills Co. Ltd. v. Sales Tax Officer, Kanpur and Another - 1965 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... al are set aside. It is held that the raw naphtha used to produce ammonia which is used in the water treatment, steam generation, inert gas generation and effluent treatment plants of the urea plant of the appellants is entitled to the exemption provided by the Exemption Notification No. 187/61 as amended from time to time. 11. There shall be no order as to costs." 5. On going through the above decisions, we find that as per the Hon'ble Supreme Court judgment in the case of Indian farmer Fertiliser, it has been held that effluent treatment activity is essential in relation to the manufacture of final product. In the present case, the entire case of the department is that the effluent treatment activity is not in relation to the manufacture of the final product which is contrary to the Apex Court judgment (supra). Following the said Apex court judgment, this Tribunal also taken a view that the effluent treatment activity is indeed in or in relation to the manufacture of final product, therefore, the cenvat credit cannot be denied. Accordingly, we are of the view that the issue is no longer res-integra and same has been decided in favour of the assessee. Accordingly, the impugned ..... X X X X Extracts X X X X X X X X Extracts X X X X
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