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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 ..... see. Accordingly, the impugned order is set aside - Appeal allowed. - MR. RAMESH NAIR, MEMBER (JUDICIAL) AND MR. RAJU, MEMBER (TECHNICAL) Shri Prakash Shah Mohit Raval Advocate appeared for the Appellant Shri R. R. Kurup, Superintendent (Authorized Representative) for the Respondent ORDER The issue involved in the present case is that whether the appellant is entitled for cenvat credit in respect of waste treatment services received from Bharuch Enviro Infrastructure Limited, Ankleshwar for treatment of their factory's waste which arises out of the manufacture of final product. 2. Shri Prakash Shah, learned counsel appearing on behalf of the appellant submits that requirement of treatment of factory waste is as per the Gujarat Pollution Board order dated 27.05.2008 and according to the consent of GPCB, the appellant has to mandatorily follow the rules for specific disposal of Trade Effluents and Emissions, as per the specifications listed by the GPCB in the consent order of GPCB wherein it is specifically mandated 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt treatment is not directly connected with the manufacture of final product of the appellant but as per the pollution control act (supra) the appellant is bound under the law to carry out the effluent treatment of the Industrial waste generated during the course of manufacture of their final product. As per the provision of Pollution Control Act, if the effluent generated in the manufacture is not treated the appellant shall not be liable to run their factory. In this undisputed position, the effluent treatment activity is necessary to carry out the uninterrupted production of the final product in the appellant s factory therefore, it can be conveniently draw the conclusion that the effluent treatment activity is a vital part of overall manufacturing of the final product if this be so then the input services used for effluent treatment are admissible input service. This issue is no longer res-integra as in the various judgments the services related to effluent treatment has been held as admissible input service and cenvat credit was allowed. Some of the judgments are cited below:- In case of M/S KANORIA CHEMICALS INDUSTRES LTD (supra) this tribunal dealt with the similar fact ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... will be applicable to the services availed by the Appellant. Accordingly, appeal filed by the Revenue is rejected and cross objection filed by Respondent is disposed of. In case of M/S. WIPRO ENTERPRISES (P) LTD., 2018 (12) TMI 1167 CESTAT CHENNAI this tribunal s Chennai Bench on the issue of credit on water treatment given the following finding:- 9. Coming to Water Treatment Service, I find that the same is utilized by the appellant as per the guidelines or norms of PCB according to which establishment of Effluent Treatment Plant in the factory is a statutory requirement for the treatment of polluted water. With regard to Garden Maintenance Services too, I find that the same is required as per the guidelines of the PCB for the purpose of a better work atmosphere. Further, I find that this issue stands decided by a plethora of decisions including the decision of the Hon ble Madras High Court in the case of Wipro Ltd. Vs. Commissioner of C.Ex., Pondicherry 2018 (10) G.S.T.L. 172 (Mad.) wherein the jurisdictional High Court has held that Housekeeping and Landscaping Services were entitled to CENVAT Credit of service tax paid on them. In the light of the discussions made her ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d goods, the input credit is admissible. In view of the above, I hold that the services availed by the appellant in respect of Effluent Treatment Plant are admissible input services and the CENVAT Credit of Rs. 1,01,797/- (Rupees One Lakh, One Thousand, Seven Hundreds and Ninety Seven Only) is admissible to the appellant. 3. As regards dis-allowance of CENVAT Credit of Rs. 3,50,286/- (Rupees Three Lakhs, Fifty Thousands, Two Hundreds and Eighty Six Only) and of Rs. 56,374/- (Rupees Fifty Six Thousands, Three Hundreds and Seventy Four Only), it is not clear from the impugned order of the Commissioner (Appeals) that as to whether the same is denied on the ground of procedural lapses or on the ground that the duty does not stand deposited by the service provider with the department. It is also seen that the appellate authority has observed that the issue of non-payment of Service Tax by service provider was raised in the Audit. Whether this was the audit of present appellant or of the service provider is not clear. As such, I would like the Commissioner (Appeals) to decide the said issues afresh after taking note of various decisions of the Tribunal relied upon by the appellant ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ny 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 (1) SCR 900. It was there held, The expression in the manufacture takes in within its compass, all processes which are directly related to the actual production . In Collector of Central Excise, New Delhi v. M/s. Ballarpur Industries Ltd. - (1984) 4 SCC 566, the respondent manufactured paper and paperboard, in the processes relating to which sodium sulphate is used in the chemical recovery cycle of sodium sulphate which forms an essential constituent of sulphate cooking liquor used in the digestion operation . The Exemption Notification concerned provided exemption to goods which had used as raw material or component parts any goods (inputs) falling under Item 68 of the First Schedule to the Act from so much of the excise duty leviab ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . 08. Accordingly, we set aside the impugned order and allow the appeals with consequential relief. CCE vs Kanoria Chemicals Industries Ltd. 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 raw material Nap ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rightly, by learned counsel for the appellants on the phraseology used in the Exemption Notification. The exemption is made available to such raw naphtha as is 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 plants is also ammonia which is used elsewhere in the manufacture of fertilisers . The water treatment, steam generation and inert gas generation plants are part and parcel of the composite process that produces as its end-product urea, which is a fertiliser. These off-site plants are part of the process of the manufacture of urea. There is no good reason why the exemption should be limited to the raw naphtha used for producing ammonia that is utilised directly in the urea plant. The Exemption Notification does not require that the ammonia should be used directly in the manufacture of fertilisers. It requires only that the ammonia should be used in the manufactur ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 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 to the said exemption. 10 . In the result, the appeals are allowed. The orders under appeal are set aside. It is held that the raw naphtha used to produce ammonia which is used in ..... X X X X Extracts X X X X X X X X Extracts X X X X
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