TMI Blog2019 (5) TMI 1092X X X X Extracts X X X X X X X X Extracts X X X X ..... r ancilliary to the completion of the manufactured product . Therefore, the definition of manufacture itself is quite wide in the Central Excise Act - The scope of the term input service under Cenvat Credit Rules, 2004 is still wider including services used by a manufacturer whether directly or indirectly in or in relation to the manufacture of the final products . It is not in dispute that the final products in this case is the sugar and that the electricity from the captive power plant and the steam generated from it were used for manufacture of the sugar. The input services in question were, in turn, used for running the captive power plant, in relation to coal, transporting Bagasse, etc. Therefore, these input services which were us ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... run the plant. Briefly, manufacture of sugar involves crushing of sugarcane and processing the sugarcane juice into sugar. A by-product of such processing is a dark, viscous, substance called the molasses which is usually sold by sugar factories to distilleries for manufacture of alcohol. Another by-product of the sugar industry is the fibrous material left after crushing the sugarcane known as bagasse. This bagasse is burnt in a captive power plant in the sugar factory and the electricity so generated is used for running the sugar factory. Alternatively, the factory may also sell this bagasse. 3. In this particular case, the appellant had three plants within their premises: 1) a sugar factory to produce sugar 2) a captive ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... their final product (sugar) and therefore no CENVAT credit is available on these input services. Rule 2(l) of the Cenvat Credit Rules, 2004 as applicable during the relevant period read as follows: input service means any service i) used by a provider of taxable service for providing an output service; or ii) used by a manufacturer, whether directly or indirectly, in or in relation to the manufacture of final products and clearance of final products upto the place of removal, and includes services used in relation to modernisation, renovation or repairs of a factory, premises of provider of output service or an office relating to such factory or premises, advertisement or s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Excise Act 1944. 7. Aggrieved, the appellant appealed to the First Appellate Authority who upheld the order of the lower authority and rejected the appeal. Hence, this appeal. 8. In the impugned order, the First Appellate Authority relied on the judgment of the Hon ble Apex Court in the case of Maruti Suzuki [2009 (240) ELT 641 (SC)] in which Hon ble Apex Court held quite clearly that in case of captive power plants to the extent excess power generation is cleared to the grid for distribution or to joint ventures such electricity cannot be said to be used in or in relation to the manufacture of the final product within the factory. Therefore, to that extent assessee will not be entitled to cenvat credit on i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y, sugar. The term manufacture is not defined in Cenvat Credit Rules, 2004 and therefore should be interpreted as per the definition of the term in Section 2(f) of the Central Excise Act, 1944 according to which manufacture includes any process incidental or ancilliary to the completion of the manufactured product . Therefore, the definition of manufacture itself is quite wide in the Central Excise Act. The scope of the term input service under Cenvat Credit Rules, 2004 is still wider including services used by a manufacturer whether directly or indirectly in or in relation to the manufacture of the final products . It is not in dispute that the final products in this case is the sugar and that the electricity from the captive power pla ..... X X X X Extracts X X X X X X X X Extracts X X X X
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