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M/s. Chettinad Cement Corporation Ltd. Versus CCE, LTU, Chennai

2018 (1) TMI 528 - CESTAT CHENNAI

CENVAT credit - not just maintenance and operation but also for collection of fly ash and transportation of the same to the appellants manufacturing premises - Held that: - On very similar facts as in the case of these appeals, the Tribunal in Ultratech Cement Ltd. Vs. CCE, Jaipur [2013 (7) TMI 637 - CESTAT NEW DELHI] has held that credit availed on service tax paid for removal of non-excisable coal fly ash emerging from captive power plant is admissible. - Penalty - Held that: - the appella .....

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iled Cenvat Credit on the basis of invoices raised by M/s. Saravana & Co. Ltd. and Sh. A. Jayapal, Tuticorin, for the operation and maintenance of Silos installed by the tax payers at the premises of Mettur Thermal Power Plant (MTTP) and Tuticorin Thermal Power Plant (TTPP) respectively. The appellants had entered into a MOU with TNEB whereby they had to install the silos collection system at MTPP that will be the property of TNEB and the operations and maintenance is to be handled by the ap .....

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maintenance charges with service tax, which in turn was availed by the appellants. It further appeared that the fly ash produced by MTPP, TTPP is lifted by the appellants at ₹ 410/- per MTs. from the premises of the former. It was also noticed from the MOU between TNEB and the appellants that 20% of the fly ash collection done by the appellant was to be spared to TNEB for allowing the same to other industries. It appeared to the department that Cenvat credit thus availed by the appellants .....

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cation of these three SCNs, the original authority concerned confirmed the proposed demands with interest and also imposed penalties. On appeal, the Commissioner (Appeals) vide impugned orders Nos.43/2017 and 44/2017 both dated 28.03.2017 upheld the orders of the original authorities and rejected the appeals. Hence the appellants are before this forum. 2.1 Today when the matter came up for hearing, Ld. Consultant, Shri R. Parthasarathy, submits that they had installed PDFACS systems for collecti .....

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ice provided by them has got direct bearing on procurement of fly ash b. The fly Ash which was collected from the power plants was exclusively meant fort the appellants cement plant and the subsequent usage of fly ash in the manufacture of cement, had not been disputed c. The appellants submit that input service is qua manufacturer and not qua the factory. d. Unlike capital goods or inputs, it is not necessary that input services should be received in the factory of manufacture. As situs of rece .....

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wer plant will not in any way restrict or take away the appellants substantive right of availing input service tax. The contractors have railed bills only for the services rendered to the appellants. g. The appellants submit that the identical issue of admissibility of input service tax credit for the service tax paid by the contractors who are managing the fly ash collection systems (PDFACS) installed by various cement plants in other parts of the country in the premises of thermal power statio .....

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. CCE, Chennai Vs. Mirra & Mirra Industries 2017 (48) STR 91 (Tri.-Chen.) f. Ultra Tech Cement Ltd. -2011(21)STR 297 and Hence, it is clear that the work orders issued were not just for maintenance and operation but also for collection of fly ash and transportation of the same to the appellants manufacturing premises. However, the department has proceeded on the mistaken premise that only services of operation and maintenance was involved and for which reason the credit availed thereon has b .....

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re credit availed on the services received. At the most, a proportionate denial of 20% should only be denied. 3. On the other hand, Ld. AR supports the impugned orders. He submits that the decision of India Cements relied upon by the Ld. Consultant is actually in favour of the department. Ld. AR also points out that the contract is only for operation and maintenance and the appellants have not been able to sufficiently establish that the work orders issued by them also include the activity of co .....

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tled to lift only 80% of fly ash and leave the remaining 20% to TNEB; that neither extraction of fly ash takes place within their premises nor the fly ash generated is exclusively used in their factory of manufacture, as such the services in question do not have any nexus in or in relation to the manufacturing of excisable goods and hence Cenvat credit availed on the same is not eligible. 5.2 I find that this conclusion of the Commissioner (Appeals) is misconceived. There is definitely a distinc .....

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f other activities including advertisement as well as promotion and market research, accounting, auditing, coaching and training business cooperation et.al. Discernably then eligible input service for the purpose of Rule 2 (l) will include even services which are even availed away from the premises of the manufacturer. On very similar facts as in the case of these appeals, the Tribunal in Ultratech Cement Ltd. Vs. CCE, Jaipur- 2014 (34) STR 426 (Tri. Del.) has held that credit availed on service .....

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