Home Case Index All Cases Central Excise Central Excise + HC Central Excise - 2017 (5) TMI HC This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2017 (5) TMI 697 - PUNJAB AND HARYANA HIGH COURTCENVAT credit - reversal - whether the assessee is entitled to CENVAT credit in respect of the LNG used by it to produce electricity sold to the third parties? - scope of input service as per rule 2(l)(ii) of the 2004 Rules - Held that: - For a service to fall within the ambit of the definition of “input service” in rule 2(l)(ii), the service must be used by the manufacturer/assessee in or in relation to the manufacture of the assessee’s final product and clearance of the final product from the place of removal - although a part of the LNG which is transported to the assessee is used by the assessee, it is not used in or in relation to the manufacture of the assessee’s final product, namely, vehicles but for generating electricity which is not a final product. Moreover, such LNG is not used for the manufacture of a final product clearance whereof is from the place of removal. The service of inward transportation of the LNG used by the assessee was not in relation to the manufacture of the final product or the clearance of the final product from the place of removal so far as it relates to the electricity that was wheeled out. The service of inward transportation of LNG would be an input service if that LNG was used in the production of electricity to the extent that the electricity was used by the assessee itself for manufacturing its final product. The electricity that was wheeled out to the third parties was, obviously, not used in the manufacture of the assessee’s final product. Therefore on the definition of the words “input service” itself, the LNG, to the extent used for production of electricity wheeled out to third parties, was not an input and the service of inward transportation thereof was not an input service. Moreover, the service of inward transportation of the LNG used by the assessee was not in relation to the manufacture of the final product or the clearance of the final product from the place of removal so far as it relates to the electricity that was wheeled out - The electricity that was wheeled out to the third parties was, obviously, not used in the manufacture of the assessee’s final product. Therefore on the definition of the words “input service” itself, the LNG, to the extent used for production of electricity wheeled out to third parties, was not an input and the service of inward transportation thereof was not an input service. There was no fraud or suppression on the part of the appellant. These are involved and complex questions of law. It is not the case of the Revenue that the appellant withheld any information for any mala fide reasons. Appeal dismissed - decided against appellant.
|