9911796707
TMI Blog2008 (9) TMI 575X X X X Extracts X X X X X X X X Extracts X X X X ..... affirmed in the impugned order. The appellants M/s. Pallipalayam Spinners Pvt. Ltd (PSPL) are engaged in the manufacture of viscose yarn, poly viscose yarn etc. They had availed MODVAT credit of duty paid on a gear box used in their windmill located at Tirunelveli, about 500 kms away from Salem where the appellant's factory is situated. The appellants incurred expenditure towards repair and maintenance of the windmill under an AMC. PSPL had availed credit of the service tax incurred on maintenance and repairs of the windmill. During the material period, the appellants had also taken credit of service tax incurred by it towards premia on workers' welfare policy as well as passengers carrying policy. Adjudicating the perceived contravention ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r generated in the windmill was available to the appellant's factory by an arrangement with the TNEB. The power generated is transferred to the TNEB grid and the same was available as a credit/currency against which equal amount of power is supplied to the appellant's factory at Salem. It is her submission that the location of the windmill away from the factory should not stand in the way of the appellant-factory's entitlement to credit of duty on capital goods used in setting up and operating the windmill. The same argument has been advanced as regards admissibility to credit of service tax paid on maintenance and repair service for maintaining the windmill in the account of the assessee mill. The taxing statutes and reforms keeping pace w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nsidered the facts of the case and the submissions by both sides. It cannot be said that prima facie the appellant has been able to make out a case against the demand, interest and penalty fastened on it. Admissibility of credit relating to capital goods and services required for running the windmill whose output was available to run the assessee's factory cannot be ruled out without a debate. It is a contentious issue and has to be sorted out after listening to the detailed arguments of both parties at the final hearing stage. As regards the insurance premia, the assessee paid it as a welfare measure in the interest of its employees. The service tax paid on such premia cannot be treated as tax on a service used by PSPL in or in relation to ..... X X X X Extracts X X X X X X X X Extracts X X X X
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