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2016 (1) TMI 593 - CESTAT MUMBAI

2016 (1) TMI 593 - CESTAT MUMBAI - TMI - Cenvat Credit - input service - maintenance and repair services of windmill farm - The electricity generated in this windmill farm are fed into grid of Maharastra State, electricity board for supply and distribution, in return appellant were allowed draw equivalent units for consumption of electricity, at their manufacturing plant, where excisable goods are manufactured and cleared on payment of duty. - Held that:- Hon’ble High Court of Bombay had conside .....

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t the factory premises. - Credit allowed - Decided in favor of assessee. - APPEAL No. E/1488/09-Mum - A/85011/16/EB - Dated:- 26-11-2015 - Mr. M.V. Ravindran, Member (Judicial) And Mr. C.J. Mathew, Member (Technical) For the Petitioner ; Shri A. Hidayutullah Sr. Advocate With Shri Makrand Joshi, Advocate For the Respondent : Shri Ajay Kumar, Jt. Commissioner (AR) ORDER Per: M.V. Ravindran This appeal is filed against Order-in-Original No. 05/COMMR (KAP/LTU/2009 dated 28/04/2009. 2. The relev .....

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vice providers who charged service tax on the services rendered. The appellant took CENVAT credit of such service tax paid. Revenue authorities are of the view that the credit so availed is incorrect and needs to be reversed. Show cause notices were issued for the demand of such CENVAT credit along with interest and also for imposing penalties. The adjudicating authority after following due process of law confirmed the demands raised with interest and also imposed penalties. 3. Learned senior co .....

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erated is consumed for the manufacturing activity and the services rendered by the service provider and the service tax paid there on, CENVAT credit can be availed. He relies upon the judgment of the Honble High Court of Bombay in the case of Commissioner of Central Excise and Customs, Aurangabad Vs Endurance Technology Pvt. Ltd.-2015-TIOL-1371-HC-Mum-ST. 4. Learned departmental representative on the other hand submits that the electricity which is produced at the windmill farm is fed into MSEB .....

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l in the case of Rajhans Metal Pvt. Ltd. 2007 (8) STR.498 (Tri-Ahmd.) held that CENVAT credit availed of service tax paid on various services rendered at windmill station and electricity so generated being not excisable, CENVAT credit cannot be utilized. 5. We have considered the submissions made by both sides and perused the records. 6. The issue that falls for consideration is whether the appellant is eligible for the CENVAT credit or otherwise, on the service tax paid on the services rendered .....

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services for maintenance and repairs are under taken by a service provider who discharged the tax liability. 8. The entire findings of the adjudicating authority is on the ground that the provisions of rule 2 (l) of the CENVAT credit rules which defines the input services, does not cover the activity as undertaken by the appellant s service provider. We find that the proposition in order-in-original is incorrect as Hon ble High Court of Bombay had considered self same issue in the case of Endura .....

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ee is entitled to avail the CESTAT credit on "management, maintenance or repair services" provided on services provided to Windmills installed and situated away from factory and factory premises? II] Whether electricity generated at Supa and Satara, situated for away, could be said to have been used for manufacture of the final product of the assessee at Waluj, Aurangabad. 3] The question No.[II] can be answered in affirmative because admittedly, the electricity generated at Supa and S .....

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ion between the parties. Even the law on this subject is very well settled by atleast three prominent judgments of our High Court reported in 2010 (20) S.T.R. 589 (Bom.) = 2010-TIOL-686-HC-MUM-ST in the case of Commissioner of Central Excise, Nagpur Versus Ultratech Cement 2010 (260) E.L.T. 369 (Bom.) = 2010-TIOL-745-HC-MUM-STin the case of Commissioner of Central Excise, Nagpur Versus Ultratech Cement Ltd. And 2013 (32) S.T.R. 532 (Bom.) = 2013-TIOL-212-HC-MUM-CX in the case of Deepak Fertilize .....

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l, high speed diesel oil and motor spirit, commonly known a petrol, used in or in relation to the manufacture of final products whether directly or indirectly and whether contained in the final product or not and includes lubricating oils, greases, cutting oils, coolants, accessories of the final products cleared along with the final product goods used as paint, or as packing material, or as fuel, or for generation of electricity or steam used in or in relation to manufacture of final products o .....

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the manufacturer; 2(B) (l) "input service means any service - (i) used by a provider of taxable service for providing an output service, or (ii) used by the manufacturer, whether directly or indirectly, in or in relation to the manufacture of final products and clearance of final products from the place of removal, and includes services used in relation to setting up, modernization, renovation or repairs of a factory, premises of provider of output service or an office relating to such fac .....

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er or producer of final products or provider of output service, which receives invoices issued under rule 4A of the Service Tax Rules 1994 towards purchases of input services and issues invoice, bill or, as the case may be, challan for the purposes of distributing the credit of service tax paid on the said services to such manufacturer or producer or provider, as the case may be. Rule 3. CENVAT Credit : (1) A manufacturer or producer of final products or a provider of taxable service shall be al .....

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10 th day of September, 2004 Including the said duties, or tax, or cess paid on any input or input service, as the case may be, used in the manufacture of intermediate products, by a job-worker availing the benefit of exemption specified in the notification of the Government of India in the Ministry of Finance (Department of Revenue) No.214/86 Central Excise, dated the 25 th March, 1986, published in the Gazette of India vide number G.S.R.547(E), dated the 25 th March, 1986, and received by the .....

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t, the CENVAT credit of duty paid on inputs may be taken immediately on receipt of such inputs in the registered premises of the person who get such final products manufactured on his behalf, on job work basis, subject to the condition that the inputs are used in the manufacture of such final product by the job worker.] Rule 4(7) - The CENVAT credit in respect of input service shall be allowed, on or after the day which payment is made of the value of input service and the service tax paid or pa .....

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ut service received by a manufacturer must be received at the factory premises. The judgments referred to above, also interpret the word "input" service in similar fashion. In the case of Commissioner of Central Excise, Nagpur Versus Ultratech Cement Ltd. [cited supra], the Division Bench of this Court held that the definition of "input service" is very wide and covers not only services which are directly or indirectly used in or in relation to manufacture of final product bu .....

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or indirectly, in or in relation to the manufacture of final products. The words 'directly or indirectly' and 'in or in relation to' are words of width and amplitude. The subordinate legislation has advisedly used a broad and comprehensive expression while defining the expression 'input service'. Rule 2(l) initially provides that input service means any services of the description falling in sub-clauses (i) and (ii). Rule 2(l) then provides an inclusive definition by enum .....

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al is ex-facie contrary to 'the provisions contained in Rule 2 (l). The first part of Rule 2 (l) inter alia covers any services used by the manufacturer directly or indirectly, in or in relation to the manufacture of final products. The inclusive part of the definition enumerates certain specified categories of services. However, it would be farfetched to interpret Rule 2 (l) to mean that only two categories of services in relation to inputs viz. for the procurement of inputs and for the inw .....

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