Home Case Index All Cases Central Excise Central Excise + AT Central Excise - 2014 (6) TMI AT This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2014 (6) TMI 272 - AT - Central ExciseCenvat Credit - excise duty paid on excisable capital goods - Merger of two companies - availing credit by the second company after merger where capital assets were procured by the first company - Difference of opinion - Majority order - Held that:- 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 fulfillment 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. An agreement should also be examined with actual state of affairs and its implementation from the records. In the present case, it may be seen from the documents and records that in 2004, M/s.SISCOL was declared as sick unit under SICA, 1985. CDR Cell report would show that SJG came forward for financing the sick unit M/s.SISCOL, as finance acts as an engine 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 dt. 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. Even prior to 31.8.2006, 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 - 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 - Decided in favour of assessee.
|