Tax Management India. Com
Law and Practice  :  Digital eBook
Research is most exciting & rewarding


  TMI - Tax Management India. Com
Follow us:
  Facebook   Twitter   Linkedin   Telegram

TMI Blog

Home

2015 (8) TMI 1234

X X   X X   Extracts   X X   X X

→ Full Text of the Document

X X   X X   Extracts   X X   X X

..... ards is obligation of the employer under the Factories Act. Accordingly, service tax paid in respect of such services is considerable tor allowance of Cenvat credit. Revenue does not dispute to such claim since there was no evidence on record to show that policy relates to any other property or contingency. Accordingly, the Cenvat credit relating to service tax paid on availing insurance services for workers is allowable. Cenvat credit on service tax paid to avail passenger carrying package policy is claimed. But no evidence was produced to show that such a policy has any integral connection either to any output or output services. In absence of such integral connection, Cenvat credit thereon is not allowable. There is a claim of insurance paid towards fire policy of factory-residential colony. Nothing was brought to record to show that the residential colony was for workers of the factory. Therefore, without the connection of the insurance policy to the workplace or workers, the claim of Cenvat credit on service tax paid in respect of insurance service is not allowable. Crane charges tor windmill blade replacement claimed in one of the appeal was not refuted by Revenue. S .....

X X   X X   Extracts   X X   X X

→ Full Text of the Document

X X   X X   Extracts   X X   X X

..... s on Windmill situated outside Factory 56,95,626 2,000 8 E/00326/2008 Sep 2006 Oct 2006 Service charges for windmill 1,42,045 1,42,045 Jan-05 Workers Welfare policy 11,446 11,446 Oct-06 Passengers carrying package policy 2,431 2,431 9 E/00294/2008 Invoice No. 729 dated 14.09.2006 Cenvat Credit on capital goods (Gear Box for Windmill) 1,51,256 1,51,256 10 E/00401/2007 Aug 2005 to March 2006 Telephone installed outside factory and used by staff 6,248 30,000 Insurance paid towards fire policy of factory residential colony 2,506 - Security charges, maintenance and repair charges towards windmill 3,07,373 - .....

X X   X X   Extracts   X X   X X

→ Full Text of the Document

X X   X X   Extracts   X X   X X

..... tion. 5.1 In view of the agreement of both sides on both facts in issue and law, the said paragraphs are reproduced below for appreciation: - 2. Ld. Counsels submit that even though the wind mills are located outside the factory where manufacturing is done energy generated by such the wind mills were barterd to Tamil Nadu Electricity Board to avail equivalent MW of power from that Board at the place of manufacture or place of provision of output service of the concerned appellants. There is no allegation that energy generated by wind mills have been utilized otherwise. 3. In absence of any material on record to the contrary, above proposition of appellants remained un-controverted by Revenue. 4. Power shortage is well known to the economy. Hydro power, thermal power as well as wind energy are normally generated at a place nearness to the source of raw material. Wind energy is generated at the place where wind is available and reciprocal arrangement is made with Electricity Board for bartering the energy so generated. This is an accepted phenomena since power/energy generated cannot be stored. Places where wind energy generated is not consumable thereat. Therefore arran .....

X X   X X   Extracts   X X   X X

→ Full Text of the Document

X X   X X   Extracts   X X   X X

..... bmission placing any cogent evidence to the contrary to establish that there is no integral relation between the security services availed to protect the windmill and ensure operation thereof. Accordingly, Cenvat credit on this count is also allowed. 9. The term-loan processing charges suffered service tax. Cenvat credit of such tax was claimed. Authority below has no findings to show that the processing of term-loan related to any other acquisition or activity,not connected to purchase of wind mill machinery.Appellant having established the connection of the processing charges paid to the financial institutions to borrow fund for purchase of windmill and machinery service tax paid on such services is allowed towards Cenvat credit. 10. Pressing claim by one of the appellants that insurance policy was taken for the welfare of workers, it was submitted that workers contribute to the production for which their welfare measure is essential under the Factories Act. Therefore, insurance policy taken to protect them from various health hazards is obligation of the employer under the Factories Act. Accordingly, service tax paid in respect of such services is considerable tor allowanc .....

X X   X X   Extracts   X X   X X

→ Full Text of the Document

X X   X X   Extracts   X X   X X

..... es, the claim of input credit thereof is not allowed. 18. In view of the aforesaid decision, the appeals listed in S.No.2to 13 and 15 of cause list are disposed in the manner indicated above and result of all such appeals is tabulated below:- Sl. No. Appeal No. Issue Demand Result 2 E/00328/2007 Maintenance and service charges for the windmill 64,148 Allowed 3 E/00026/2009 Term Processing charges for purchase of windmill and machinery 1,31,580 Allowed 4 E/00474/2010 Maintenance charges for windmill 29,326 Allowed 5 E/00625/2010 Maintenance charges for windmill 40,893 Allowed 6 E/00639/2010 Annual Operation and Maintenance of windmill 91,726 Allowed 7 E/78/ .....

X X   X X   Extracts   X X   X X

→ Full Text of the Document

X X   X X   Extracts   X X   X X

 

 

 

 

Quick Updates:Latest Updates