TMI Blog2014 (11) TMI 782X X X X Extracts X X X X X X X X Extracts X X X X ..... gine of growth. It appears from the Show Cause Notices that M/s. JSWPL, one of the companies of SJG, have expertise in constructing and operating Power Plants and M/s. JSW Steel Ltd. another company of SJG, is one of the purchasers of the final product of M/s. SISCOL. It is recorded in the CDR Cell report that there was proposal of merger of M/s. SISCOL with SJG, which is corroborated by Director’s report dated 26-4-2005 of JSWPL balance sheet. It is mentioned in “Unit III Debentures Trust Deed” dated 22-9-2005 of M/s. JSWPL that with a view to finance its 2 x 30 MW plant at SISCOL, the company has approached the Debenture holders. JSWPL declared to TNEB by letter dated 6-1-2005 that Captive Power Plant is installed inside the SISCOL premises to meet the present and future power requirements of SISCOL. Further, TNEB approved as SISCOL Captive Power Plant located in the company’s premises. Rule 4(3) of CCR, 2004 provides that the Cenvat credit in respect of the capital goods shall be allowed to a manufacturer, even if the capital goods are acquired by him on lease, hire-purchase or loan agreement, from a financing company. Rule 4(3) has a wide amplitude in so far as it would cove ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ngly for payment of duty on the clearance of final products under Section 11A(2) of the Central Excise Act, 1944 along with appropriate interest under Section 11AB of the Central Excise Act, 1944. (c) Penalty of ₹ 6,79,61,303/- under Rule 15(2) of the Cenvat Credit Rules, 2004 read with Section 11AC of the Central Excise Act, 1944. 2. The appellants have also filed a miscellaneous application for placing additional evidence on record under Rule 23 of the CESTAT (Procedure) Rules, 1982. 3. The application for bringing additional evidence on record is admitted, as the evidence produced by the appellants were available at the time of adjudication and are very much relevant for arriving at the correct conclusion in the matter. 4. M/s. JSW Power Ltd. ( JSWPL - in short) filed an appeal against imposing of penalty of ₹ 5,00,00,000/- under Rule 26 of the Central Excise Rules, 2002 read with Rule 15 of the Cenvat Credit Rules, 2004. 5. As both the appeals have arisen from a common order and the facts are similar, therefore, both the appeals are heard together and disposed of by a common order. 6. The facts of the case are that the main appellants M/s. JSW ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... period July, 2006. 10. The total denial of Cenvat credit for the entire period is ₹ 6,79,61,303/- is on the following grounds :- (a) The capital goods have not been received by M/s. SISCOL in its premises as the land where these capital goods were received was leased out to M/s. JSWPL and the CPP was not in the possession of M/s. SISCOL to take credit; (b) Rule 4 of the Cenvat Credit Rules, 2004 requires that goods should be received within the factory to take credit. The real manufacturer is only M/s. JSWPL and as the land is leased out, the owners of the land is M/s. JSWPL and not M/s. SISCOL; and (c) Possession of capital goods was with M/s. JSWPL and not with M/S. SISCOL. 11. The adjudication took place and a detailed order was passed confirming the demand of ₹ 6,79,61,303/- towards wrong credit availed by M/s. SISCOL and ₹ 6,79,61,303/- towards excise duty as M/s. SISCOL has utilised the credit for the payment of excise duty and equivalent amount of penalty under Rule 15(2) of the Cenvat Credit Rules, 2004 read with Section 11AC on the ground that M/s. SISCOL has suppressed the fact of existence of lease agreement with M/s. JSWPL ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssioner of Customs Central Excise, Visakhapatnam reported in 2007-TIOL-09-CESTAT-BANG; (xi) Collector of Central Excise v. M/s. Solaris Chemtech Ltd. reported in 2007 (214) E.L.T. 481 (S.C.); (xii) M/s. Finolex Industries Ltd. v. Commissioner of Central Excise, Pune-II reported in 2003 (156) E.L.T. 96 (Tri.-Mumbai); (xiii) M/s. Chemplast Sanmar Ltd. v. Commissioner of Central Excise, Coimbatore reported in 2004 (177) E.L.T. 446 (Tri.-Chennai); and (xiv) M/s. Gujarat Ambuja Cements Ltd. v. Commissioner of Central Excise, Chandigarh reported in 2001 (130) E.L.T. 129. 16. On the other hand, Shri Alok Shukla, learned JCDR, who appeared on behalf of the Revenue, supported the impugned order and drew our attention to the impugned order. He relied on the decisions of (i) Majestic Auto Ltd. v. Commissioner of Central Excise, Ghaziabad reported in 2004 (173) E.L.T. 145 (Tri.-Del.); and (ii) Chemplast Sanmar Ltd. v. Commissioner of Central Excise, Coimbatore reported in 2004 (177) E.L.T. 446 (Tri.-Chennai). 17. He also drew our attention to the transfer of lease deed, wherein, the lessee (M/s. JSWPL) shall be entitled without any inference ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s being carried on or is ordinarily carried on. 21. In this case, the further dispute is that whether the land on which these capital goods installed are part of the factory or not. 22. In this regard, the learned counsel for the appellants relied on the decision of Vikram Cement (supra), wherein the Hon ble Apex Court has held that MODVAT/CENVAT will be available to the assessees, if mines are captive mines and they constitute as one integrated unit together with the concerned cement factory. 23. In this case also, it is countered that the power plant is a CPP , which is to be used by the appellants for manufacturing of their final product. Similar view was also taken by the Tribunal in the case of Sanghi Industries Ltd. (supra), wherein the issue was that the Cenvat credit was denied on the premise that Light Diesel Oil/Furnace Oil used in power plant situate 12 kms. away from the clinker unit entitled to credit. The core reason for denial of credit was that the inputs were not used in the factory. However, this Tribunal has held that the assessees are entitled to avail Cenvat credit on inputs/capital goods although they were not used in the factory, relying on the d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ods falling under heading 6805, grinding wheels and the like, and parts thereof falling under heading 6804 of the First Schedule to the Excise Tariff Act, are in the possession of the manufacturer of final products, or provider of output service in such subsequent years. (3) The Cenvat credit in respect of the capital goods shall be allowed to a manufacturer, provider of output service even if the capital goods are acquired by him on lease, hire-purchase or loan agreement, from a financing company. (4) The Cenvat credit in respect of capital goods shall not be allowed in respect of that part of the value of capital goods which represents the amount of duty on such capital goods, which the manufacturer or provider of output service claims as depreciation under section 32 of the Income-tax Act, 1961. (5)(a) The Cenvat credit shall be allowed even if any inputs or capital goods as such or after being partially processed are sent to a job worker for further processing, testing, repair, re-conditioning, or for the manufacture of intermediate goods necessary for the manufacture of final products or any other purpose, and it is established from the records, challans or memos or a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ty of India Ltd. v. Commissioner of Central Excise, Bhubaneswar-II reported in 2007 (219) E.L.T. 960 (Tri.-Del.) wherein the facts of the case are that M/s. SAIL has a steel plant at Rourkela. That plant was having a CPP also. In 1999, the steel mills received a rotor for use in its captive power plant and took MODVAT (capital goods) Credit. Subsequently, in 2001, the CPP was spun off as a separate identity (subsidiary). In the subsidiary, M/s. SAIL continued to have 98% shareholding and remaining 2% went to National Thermal Power Corporation ( NTPC - in short) . In those set of facts, it was argued by the learned counsel for the appellants that the deal was executed for business of restructuring with intent to strengthening M/s. SAIL s core business activity and it was not a case of sale as normally understood. It is also the contention of the learned Counsel that in this case corporate veil was required to be lifted so as to arrive at the reality of the transaction and reach appropriate conclusion. Therefore, in that case, this Tribunal has relied on the judgment of the Hon ble Supreme Court in the case of State of Uttar Pradesh v. V. Renusagar Power Co. and Others reported ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Ltd. v. Commissioner of Central Excise, Raipur reported in 2009 (236) E.L.T. 711 (Tri.-Del.), the relevant facts of the said case are that the appellants had a CPP installed within their factory premises. The appellants had entered into a Joint Venture agreement with M/s. NTPC and started a subsidiary company known as M/s. Bhilai Electric Supply Company Ltd. (M/s. BESCL - in short) with 99.8% of the equity company from SAIL and the balance equity coming from the joint-venture-partner namely M/s. NTPC . In that case also, although the power plant was installed in the factory premises of the M/s. SAIL and it is only the CPP of M/s. SAIL though the ownership of the same was transferred to M/s. BESCL, a subsidiary of M/s. SAIL; the entire power generated by M/s. BESCL requires to be sold to M/s. SAIL. In that scenario also, the matter was referred to Larger Bench for decision but the Larger Bench of this Tribunal returned the reference as in the referral order the reasons of difference were not given. Anyhow, the facts of that case are also somehow different from this case. As in this case, M/s. JSWPL was given the land on lease only for installation of CPP , which in turn is t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t is to be seen for what purpose CPP was installed by whom and from whom. As M/s. JSWPL and M/s. SISCOL have merged with M/s. JSWSL, therefore, all the units are one and the lease agreement is for procuring the finance for installation of CPP only. 32. The case law relied upon by the learned JCDR in the case of M/s. Majestic Auto Ltd. (supra) is also not relevant to the facts of this case. As in that case, M/s. Hero Briggs Stratton Auto Pvt. Ltd., had taken on lease a part of the factory premises of M/s. Majestic Auto Ltd., who have also sold the machines and equipments on which they have availed MODVAT credit and M/s. Majestic Auto Ltd., have got manufactured the parts on job work basis from M/s. Hero Briggs Stratton Auto Pvt. Ltd. In this case, the facts are that a part of the land has been leased out to M/s. JSWPL for installation of CPP which is being used by the appellants for manufacturing of their final products. There is no contract between the appellants and M/s. JSWPL for generation of electricity in the CPP by M/s. JSWPL and was to be sold to the appellants. In fact, M/s. JSWPL was leased out land for installation of CPP only. Therefore, the decision in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of excisable goods and utilize such credit for payment of excise duty on final products manufactured by him. In this case we are concerned with taking of credit on capital goods. 37. The relevant facts are already recorded by the Judicial Member. Prima facie there can be doubt whether the facts would fit into the conditions prescribed in Cenvat Credit Rules, 2004 for taking credit. Revenue seeks to deny the credit for the reasons of not having received or possessed or used the capital goods in the factory of the appellant. Appellant seeks approval of credit taken based on liberal interpretation of rules and further extensions the principles approved in decisions of the Tribunal and the Courts rather than by a straight interpretation of the Rules. It appears that allowing this credit will lead to a situation where a manufacturer can take credit of duty paid by its neighbour from neighbour s funds for setting up a power plant so long as at least a part of the power generated is used in the factory of the manufacturer taking credit. Since such a consequence may not be warranted in the scheme of Cenvat Credit Rules, 2004, I intend to examine this matter by formulating certain issues ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... credit was taken. The value of the goods and excise duty thereon were paid by JSWPL on the date on which credit was taken by SISCOL. These are two different companies. There is no relationship of one as the holding company of the other which fact existed in some of the decisions relied upon. There is no relationship of SISCOL as job worker of JSWPL which was the fact in cases where persons not paying for the goods along with duty were allowed to take credit of duty. 41. There is a dispute as to whether capital goods were received in the factory of SISCOL on the date of taking credit. This is because of the peculiar facts of this case. SISCOL had leased out to JSWPL 50.14 acres of their factory-land on nominal lease charges of ₹ 10000 per annum for setting up a power plant. So SISCOL claims that the land where the power plant was set up was part of their factory and hence capital goods were received in their factory for the purpose of Rule 4(2)(a). They also submit that the power plant was being set up for generating power for use in their factory only. JSWPL set up the plant for the reason that SISCOL did not have the financial capability to set up a power plant at that p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ndustries Ltd. v. CCE - 2003 (156) E.L.T. 96 Capital goods Yes No but appurtenant to the factory 11 Chemplast Sanmar Ltd . v. CCE - 2004 (177) E.L.T. 446 Capital goods Yes Yes 12 Gujarat Ambuja Cements Ltd . v. CCE - 2001 (130) E.L.T. 129 Capital goods Yes Yes 13 Konark Met Coke Ltd . - 2007 (207) E.L.T. 470 Capital goods Yes No 43. There are other decisions of the type mentioned at S. No. 5 where the job worker was allowed to take credit notwithstanding the fact that the job worker had not paid the value of the capital goods or excise duty on the capital goods from his funds. Three such cases are,- (i) CCE v. Sunrise Chemicals Industries - 2010 (262) E.L.T. 110 (Guj.); (ii) Prolite Engineering Co. v. UOI - 1995 (75) E.L.T. 257 (Guj.); (iii) Evergreen Engineering Co. Pvt. Ltd. v. CCE - 2012 (278) E ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tal goods on which credit is taken and the final products manufactured. Thus s further liberalization from rules and decisions given so far is involved. This liberalization will bring in certain other consequences. As per the Rules credit can be denied only if the capital goods are exclusively used in the manufacture of exempted products. So if such power plant sells major part of the electricity generated, credit cannot be denied to the neighbour so long as part of such electricity is used by that neighbour. In this case such a situation did not exist and electricity generated was fully used by SISCOL. However such free bending of the Rules is not desirable because it can defeat some of the basic criteria in the Rules like the one that the person who purchased the goods cannot capitalize the duty amount and claim depreciation. The person who pays for the value of goods and duty may take credit and claim depreciation and another person who uses the goods can claim the credit and the department may not know about the misuse because the books of account of the owner is not audited normally as in this case wherein the owner of the goods is not a Central Excise assessee. The owner may ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 5 of the order such bending of rules is to be adopted when there are no other disentitling factors or just circumstances. In this case the question is whether in a matter of taxation the benefit of a future event can be granted from a past date. This is on a different footing as compared to a situation when the landlord could not get a tenant evicted and in between the landlord came in possession of an alternate property for his requirement. In my view duty liability on a specific point of time cannot decided with a future event when such a course of action is not specifically authorized by law. Such an approach will cause too many cases of re-opening of tax incidence both in favour of assessees and in favour of Revenue and is not a practicable approach. The tax liability from the date of future event can be certainly looked into. If credit was taken during a period when the assessee was not entitled to take credit, there is loss caused to Revenue at least to the extent of interest for the period for which there was no eligibility for the credit. However while deciding matters of penalty these future event can be taken into account. 50. Now there is a need to examine the main d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... orate veil should be lifted and Hindalco and Renusagar be treated as one concern and Renusagar s power plant must be treated as the own source of generation of Hindalco and should be liable to duty on that basis. In the premises the consumption of such energy by Hindalco will fall under Section 3(1)(c) of the Act. The learned Additional Advocate-General for the State relied on several decisions, some of which have been noted. 66. The veil on corporate personality even though not lifted sometimes, is becoming more and more transparent in modern company jurisprudence. The ghost of Salomon s case still visits frequently the hounds of Company Law but the veil has been pierced in many cases. Some of these have been noted by Justice P.B. Mukharji in the New Jurisprudence (Tagore Law Lecture 183). 67. It appears to us, however, that as mentioned the concept of lifting the corporate veil is a changing concept and is of expanding horizons. We think that the appellant was in error in not treating Renusagar s power plant as the power plant of Hindalco and not treating it as the own source of energy. The respondent is liable to duty on the same and on that footing alone; this is evident ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... overnment and Central Government were considering Renusagar to be own source of generation of Hindalco in many matters. So while demanding duty considering that Renusagar was not own source of generation the Government was seen approbating and reprobating on the issue. No such facts exist in the present case. 52. In the present case SISCOL and JSWPL were different companies with no relationship through shareholding when credit was taken. By lifting the corporate veil of SISCOL one cannot see JSWPL at the time of taking credit. There was only an intention on the part of JSWPL to take over SISCOL at a future date. The legal status of the companies involved cannot be done first by lifting of corporate veil and then by adopting future intentions of parties as the next criterion. 53. There is a further issue in this matter. Traditionally lifting of corporate veil has been done for denying a claim of the parties concerned which claim is set up through subterfuges of separate entities and not for granting a benefit to the parties who for their own reasons hold themselves to be different. Nevertheless the Apex Court has expanded the concept to grant a benefit by lifting corporate ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of Central Excise Act. The credit taken was disclosed to the department in returns filed. The department was also able to initiate action for recovery of the tax short paid within time. I consider this to be case of dispute of legal interpretation. So a nominal penalty of Rs. twenty-five lakhs under Rule 15 of Cenvat Credit Rules only is warranted in the peculiar facts of the case. These issues can be decided finally after a view is taken on the eligibility for credit on the dates on which credits were taken. Sd/- (Mathew John) Technical Member Dated : 10-10-2012 POINT OF DIFFERENCE IN OPINION 56. In the facts and circumstances of the case, - Whether it is proper to allow Cenvat Credit of excise duty paid on excisable capital goods paid for and used by JSWPL to be taken by SISCOL from October 2005 onwards as held by Judicial Member? Or Whether it is proper to allow Cenvat Credit of excise duty paid on excisable capital goods paid for and used by JSWPL to be taken by SISCOL from 31-8-2006 when the two companies got merged as held by Technical Member? (Pronounced on 5-11-2012) The registry is directed to take appropriate steps for resolving the abo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he adjudication order and allowed the appeals with consequential reliefs, if any. The learned Technical Member held that credit would be eligible from 31-8-2006 (subject to the condition that duty element was not capitalized in the accounts of the company, which incurred expenditure for claiming depreciation). It has also been held that the appellant is required to pay interest for utilisation of Cenvat credit prior to 31-8-2006 and a penalty of ₹ 25 lakhs is warranted under Rule 15 of CCR, 2004 in the peculiar facts of the case. 62. The scope of the decision of the Third Member is as to whether it is proper to allow Cenvat credit of excise duty paid on excisable capital goods paid for and used by M/s. JSWPL; to be proper taken by SISCOL from October, 2005 as held by the learned Judicial Member OR from 31-8-2006 as held by learned Technical Member. The learned advocate on behalf of the appellant submitted that the consequence of the order of learned Technical Member is that the appellant is liable to pay interest of ₹ 22,71,971/- for the period prior to 31-8-2006, as no depreciation was claimed by the company and penalty of ₹ 25,00,000.00. 63. The ld. Author ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... asing manufacturer. Rule 3 of Cenvat credit Rules, 2002 states that A manufacturer or producer of final products shall be allowed to take credit of (i) duty of excise specified . leviable under the Act . paid on any inputs or capital goods received in the factory on or after the first day of March, 2002. Thus, the credit available is equal to the duty paid on any inputs or capital goods. In the present case, the disputed amount of duty was paid by the manufacturer of the inputs when removing the same. 64.1 It is also contended that M/s. SISCOL is not the owner of the capital goods. The Hon ble Punjab and Haryana High Court in the case of CCE, Ludhiana v. Pepsi Foods Ltd. - 2010 (254) E.L.T. 284 (P H) rejected the appeal filed by Revenue and held that ownership of the goods cannot be the criteria for denying modvat credit in view of Board s Circular dated 1-3-1999. It has further been held that the Tribunal is correct in allowing Modvat credit on capital goods received when endorsement is made in the Bill of Entry by the importer. In the present case, Cenvat invoices were consigned in favour of M/s. SISCOL. 64.2 In the case of Vikram Cement v. CCE, Indore - 200 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... considered the rival contentions and perused the record. There is no dispute of fact between the parties. Undisputedly, Renusagar Power Plant is supplying the entire power production to the appellant company. Undisputedly, the insurance policies cover only loss to the plant and none of the employees. 12. From the above submissions made on behalf of the respective parties, it is obvious that the main dispute in this case whether or not Renusagar Power Plant is captive plant of appellant company. Captive plant has not been defined in the Act or Rules. However, by the terminology used, it obviously means power generation plant supply only to the parent company. Captive generating plant is defined under Section 2(8) of Electricity Act, 2003 which reads : Captive generating plant means a power plant set up by any person to generate electricity primarily for its own use and includes a power plant set up by any co-operative society or association of persons for generating electricity primarily for use of members of such co-operative society or association. This definition also states that captive generating plant means a power plant set up by any person or company to generate ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... SCOL. 65. The main contention of the ld. AR is that the concerned power plant is not an integral part of the manufacturing unit namely M/s. SISCOL. It is contended that power plant was not acquired by M/s. SISCOL on loan, lease or hire-purchase or loan agreement from a financing company as per Rule 3(5) of the said Rules. To sum up, there is no relation between M/s. SISCOL and M/s. JSWPL and it would lead to neighbour taking the credit on capital goods. 65.1 The ld. AR drew the attention of the Bench to the relevant portion of the impugned order in so far as by the lease agreement, the possession of the land is taken away from SISCOL. It is contended that a lease document which affects an actual demise and operates as lease and must create a present and immediate interest in land. When there is interest and complete possession by the JSWPL on the leased land, the Lessor SISCOL cannot be held to be in possession of the leased portion of land. Further, there is no clause in the said lease agreement to support their contention that the power plant or capital goods will be in possession of Lessor i.e., SISCOL. In terms the agreement, manufacture of power plant was taken place in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a power plant for SISCOL only. (iv) The letter dated 26-4-2006 of SISCOL addressed to the Chief Engineer, Tamil Nadu Electricity Board, Chennai is for parallel operation and wheeling of power for 2 x 30 MW CPP. Here, SISCOL is asking the Electricity Board for approval for grid paralleling and wheeling of power for 2 x 30 MW power plant. The letter also says that the plant will be commissioned in the first week of May, 2006. Thus, the permission for the CPP is sought by SISCOL and not by JSW Power Ltd. 66.1 The learned advocate also submitted that it is a captive power plant and the electricity generated was only used by M/s. SISCOL. In this context, the learned advocate submitted as under :- (a) The requirement of steam is around 230 MW per hour. There are five boilers in the entire campus; 3 boilers in SISCOL area and 2 boilers in JSW power plant area (as alleged in Show Cause Notice); to produce 274.5 MT of steam. Out of total 5 boilers, the boilers with capacity of 45 MT, 45 Mt and 25.5 MT area in SISCOL area and the other two boilers with a capacity of 32 MT and 127 MT are in the leased area. The boiler Nos. T-7282, T-7283 and BH-085 are located in SISCOL area. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... group steel company. (iii) The Directors Report dated 26-4-2005 of JSWPL from balance sheet, is reproduced below :- Unit III (Expansion) Jindal South West (JSW) Group has recently taken over Southern Iron Steel Company Limited (SISCOL) Pottaneri, near Salem. SISCOL s current capacity is 300,000 tons per annum and as per the CDR scheme approved by their lenders, SISCOL is doubling its capacity to 600,000 tons per annum SISCOL also proposes to set up a coke oven plant with capacity of 400,000 tons per annum. The power requirement of SISCOL is 30 MW and is expected to go up to 60 MW after expansion. SISCOL had approached JPL for setting up a power plant of 2x30 MW capacity at their premises to meet their power requirements and JPL has taken up this project and work is in progress. (iv) The facts of the case, in brief, as narrated in the show cause notice dated 16-4-2007 is reproduced below :- Both M/s. JSW Power Ltd., Unit III, Toranagallu Village, Bellari District, Karnataka and M/s. JSW Steel Ltd., Unit 3, Toranagallu Village, Bellari District, Karnataka, are separate Legal/corporate entities having their common head office at Jindal Mansion, 5-A, Dr. G. De ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... who accepts the transfer on such terms . Explaining this definition, Mulla had observed as follows in Transfer of Property Act : The essential elements of a lease are (1) the parties, (2) the subject-matter, or immovable property, (3) the demise or partial transfer, (4) the term, or period, and (5) the consideration, or rent. 68.1 On perusal of the lease agreement, it is seen that the Lessor (SISCOL) requested to the Lessee (JSWPL) to set up a power plant in the premises of the Lessor (SISCOL) to take care of the power generation of the Lessor to which Lessee has agreed. The lease of the immovable property is determined for a limited period conditionally on the happenings of some events. The tenure of the lease agreement depends upon the happenings of the future events. In the instant case, it is a conditional transfer of the property with an interest created on a transfer of the property and dependent upon the fulfilment of the condition. Thus, it is clearly evident that M/s. SISCOL had provided their land to M/s. JSWPL with a condition to set up a power plant and the electricity generated would be consumed in manufacturing activities of M/s. SISCOL. 68.2 An agreemen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2006, it was a Captive Power Plant of M/s. SISCOL as approved by TNEB under the Electricity Act. SISCOL was a sick unit. They entered into lease agreement with M/s. JSWPL, a relationship had already been developed prior to October, 2005, as evident from CDR Cell report, JSWPL balance sheet, etc., for financial accommodation to get loan from UTI Bank Ltd. for setting up C.P.P. and one of the considerations is that electricity would be supplied to M/s. SISCOL, which is an integral part of manufacturing activities of M/s. SISCOL. 69. In view of the above discussion, I find that it is proper to allow Cenvat credit to M/s. SISCOL from October, 2005 on capital goods used in setting up Power Plant for generation of electricity, which was captively consumed within the factory of M/s. SISCOL for manufacturing of their final product, as held by the ld. Judicial Member. 70. Registry is directed to place the file before the regular Bench for final order. Sd/- (Pradip Kumar Das) Member (Judicial) Dated : 23-5-2014 MAJORITY ORDER 71. In view of the majority decision, the impugned orders are set aside and the appeals are allowed with consequential reliefs, if any. (P ..... X X X X Extracts X X X X X X X X Extracts X X X X
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