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TMI Blog2024 (1) TMI 246X X X X Extracts X X X X X X X X Extracts X X X X ..... ce and credit is admissible. He placed reliance on the following judgments: - * Cheminova India Ltd vs. CCE & ST, Surat -II - E/11732/2014- Final Order dated 28.06.2023 * Adroit Pharmachem Pvt Ltd vs. Commissioner of C.Ex. & ST., Vadodara - 2022 (1) TMI 59 CESTAT Ahmedabad * Commissioner of C.Ex.& ST., Surat-II vs. M/s. Kanoria Chemicals & Industries Ltd - 2015 (7) TMI 970 CESTAT Ahmedabad * Wipro Enterprises (P) Ltd vs. Commissioner of GST & Central Excise - 2018 (12) TMI 1167 CESTAT Chennai. * Anar Chemicals Pvt. Ltd vs. CCE - 2011 (24) STR 32 (Tri.Ahmd) * Indian Farmers Fertilizer Cooperative Ltd vs. Collector, - 1996 (86) ELT 177 (SC) * Union of India vs. Hindustan Zinc Ltd - 2019 (367) ELT 616 (Raj) * Collector of C. Ex. Vs. Eastend Paper Industries Ltd - 1989 (43) ELT 201 (SC) * Deepak Fertilizers & Petrochemicals Corpn. Ltd vs. C.C.Ex., Belapur - 2013(32) STR 532 (Bom.) * C.C.E & Cus., Aurangabad vs. Endurance Technology Pvt Ltd - 2017 (52) STR 361 (Bom.) * Huhtamaki PPL Ltd vs. Commissioner of C.Ex. & ST., Surat -I - 2021 (50) GSTL 309 (Tri. Ahmd) * Commr. Of C. Ex., Vadodara - II vs. Siemens Healthcare Diagnostics Ltd - 2014 (36) STR 192 (Tri. Ahmd) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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." b) Cheminova India Ltd vs. CCE & ST, Surat -II - E/11732/2014- Final Order dated 28.06.2023 - "07. We have carefully considered the submissions made by both the sides and perused the records. Since all the appeals are on the same issue though heard on different dates i.e. 20.04.2023 & 29.05.2023, we are deciding all the appeals together. We find that the revenue has denied the cenvat credit on services related to the effluent treatment activity of the waste generated during the course of manufacture of the final product of the appellant. The denial of cenvat credit is on the ground that the effluent treatment activity is post manufacture which has nothing to do with the manufacture of final product of the appellant. We find that even though the effluent treatment is not directly connected with the manufacture of final product of the appellant but as per the pollution cont ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e 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." 5.1 In view of the above observations made by Apex Court, treatment of effluent from a factory has to be considered as essential and integral part of the process of manufacture. The ratio of this judgment will be applicable to the services availed by the Appellant. Accordingly, appeal filed by the Revenue is rejected and cross ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... business. Admittedly, the Pollution Control Board requires the appellant to maintain Effluent Treatment Plant upto a certain standard and all the services used by the assessee for maintenance of such standard has to be held as activities relating to business. In the case of Brakes India Ltd. referred supra, it was held that creation and maintenance of garden within the factory premises by treating industrial and domestic sewage water, is mandatory requirement from Pollution Control Board and the man power services used for garden maintenance are required as infrastructure for manufacture and clearance of final product and the credit is admissible in respect of the same. Similarly, in the case of Coca Cola India Pvt. Ltd. referred supra, it stand held that the expression "business" is an integrated/continuous activity and not confined or restricted to mere manufacture of production. The activities in relation to business covers all activities related to functioning of business. As such, as along as there is a connection between the services and the manufactured goods, the input credit is admissible. In view of the above, I hold that the services availed by the appellant in respec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e 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 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............. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cturing 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 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. In view of the above judgments and other judgments cited by the appellant, it can be seen that the issue is no longer res-integra as the services availed in respect of effluent treatment plant for treatment of industrial waste is in relation to the overall manufacturing activity of the appellant's final product in the appellant's factory therefore, the said services are input service hence, the credit is admissible. 08. Accordingly, we set aside the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ature restricted the benefit of Cenvat credit for input services used in respect of inputs only to these two categories viz. for the procurement of inputs and for the inward transportation of inputs. This interpretation which has been placed by the Tribunal is ex facie contrary to the provisions contained in Rule 2(l). The first part of Rule 2(l) inter alia covers any services used by the manufacturer directly or indirectly, in or in relation to the manufacture of final products. The inclusive part of the definition enumerates certain specified categories of services. However, it would be farfetched to interpret Rule 2(l) to mean that only two categories of services in relation to inputs viz. for the procurement of inputs and for the inward transportation of inputs were intended to be brought within the purview of Rule 2(l). Rule 2(l) must be read in its entirety. The Tribunal has placed an interpretation which runs contrary to the plain and literal meaning of the words used in Rule 2(l). Moreover as we have noted earlier, whereas Rule 3(1) allows a manufacturer of final products to take credit of excise duty and Service Tax among others paid on any input or capital goods received ..... X X X X Extracts X X X X X X X X Extracts X X X X
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