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TMI Blog2023 (10) TMI 592X X X X Extracts X X X X X X X X Extracts X X X X ..... etc. used for support structure of capital goods in the factory of the appellant. 3. Whether the demand of duty on the clearance of MS Scarps and scrape of capital goods is correct and legal in terms of Rule 3 (5A) of Cenvat Credit Rules, 2004. 4. Whether Show cause notices are barred by limitation. 1.2 The brief facts of the case are that the appellant in the month of May 2006 acquired Polymer Division of factory of Gharda Chemicals Ltd. The appellant obtained central excise registration on 16.05.2006 and undertook manufacture of excisable goods of Chapter 39 of the Central Excise Tariff at the said factory. The other two appellant are employees of the appellant company M/s. Solvay Specialities India Pvt Ltd. For the purpose of acquiring the said factory, the appellant commissioned the services of technically qualified environmental consultancy firm called Environmental Resources Management, Belgium (hereinafter ERM) for carrying out " Environmental due diligence Auditing" of the site for investigation of environmental impact by way of contamination of the soil and ground water. However the report of said Environmental due diligence Audit was also required for obtaining the c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... roduction activity in the appellant's factory. In support he placed reliance on the following judgments:- * Sujal Dye Chem Industries vs. CCE - 2012 (284) ELT 73 * CCE vs. Brakes India Ltd - 2019 (369) ELT 577 (Mad) * Hindustan Zinc Ltd vs. CCE - 2013 (288) ELT 406 * Pudumjee Pulp & Paper Mills Ltd vs. CEC - 2018 (10) GSTL 550 * CCE vs. Millipore India P. Ltd - 2012 (26) STR 514 (Kar) * Hiedelberg Cement India Ltd vs. CCE - 2017 (47) STR 98 2.1 He submits that as regard the department's case that because services of Environmental Audit were received before takeover of the factory and commencement of manufacture, they cannot be input service is untenable in law. He submits that so long the service are required for operation of the factory and carrying out production then irrespective the time of service received i.e. even before acquisition of the factory the credit cannot be denied. In support he placed reliance on the following judgments:- * Hindalco Industries Ltd vs. CEC - 2019 (5) TMI 1620 - CESTAT New Delhi * BASF vs. CCE - 2023 (1) TMI 54- CESTAT Ahmedabad * Zydus Technologies Ltd vs. CST - 2015 (39) STR 657 * Pepsico India Holdings P. Ltd vs. CCE - 2022 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o of the view that we had correctly taken the Cenvat Credit. Simply because the preventive officers subsequently took a different view, the larger period of limitation cannot apply. He placed reliance on the following judgments:- * Hindalco Industries Ltd vs. CCE - 2019 (5) TMI 1620- CESTAT New Delhi * Steelcast Ltd vs. CCE - 2009 (14) STR 129 (upheld in 2011 (21) STR 500) * Religare Securities Ltd vs. CST - 2014 (36) STR 937 * Lanxess Abs Ltd vs. CCE - 2011 (22) STR 587 * K.K Appachan vs. CCE - 2007 (7) STR 230 2.5 As regard the second show cause notice dated 17.10.2013, the larger period cannot invoked in the light of the following judgments:- * Nizam Sugar Factory vs. CCE - 2006 (197) ELT 465 (SC) * ECE Industries Ltd vs. CCE - 2004 (164) ELT 236 (SC) * Bhagwati Spherocast P. Ltd v. CCE - 2019 (368) ELT 308 (Guj.) 3. Shri Tara Prakash, Learned Deputy Commissioner (AR) appearing on behalf of the Revenue reiterates the finding of the impugned order. 4. We have carefully considered the submission made by both sides and perused the records. The main issue is that whether the services related to pollution control measures received by the appellant are eligible inpu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y with requirement of Water (Prevention and Control of Pollution) Act 1974 is an inputservice. The Hon'ble High Court held that receiving service for maintaining the factory in eco-friendly manner as per statutory requirements is related to manufacture of final product and therefore such service is an input service. c) Hindustan Zinc Ltd v CCE-2013 (288) ELT 406 In this decision, the Hon'ble Tribunal has held that services received for maintenance of plantation, lawn, etc, to comply with Pollution Control laws is a service which is essential for manufacturing operations and therefore is in relation to manufacture and accordingly an input service. d) Pudumice Pulp & Paper Mills Ltd v CCF-2018 (10) GSTL 550 In this decision the Hon'ble Tribunal has held that receiving service. for maintaining a garden in the factory to comply with Pollution Control laws is a service in relation to manufacture since without complying with Pollution control laws no manufacture can be undertaken in the factory. To the same effect is the decision in Thyssenkrupp Electrical Steel (1) P. Ltd v CCF-2017 (3) GSTL 176 e) CCE v Millipore India P. Ltd -2012 (26) STR 514 (Kar) In thi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... this decision, the Appellant availed Cenvat Credit of service tax paid on various services received in the course of acquisition of land for the factory as set out in Paras 2 and 3 of the judgment. The said services were received from 2009 onwards, whereas the plant started production only in 2013. The Tribunal held that the Appellant was entitled to take credit of the said services, since the availing of the said services was required for undertaking, manufacture of the final products. b) BASF vs. CCE-2023 (1) TMI 54-CESTAT Ahmedabad In this decision, the services were received by the Appellant during the period April 2011 to March 2016 while the factory was in the process of being set-up and before the commercial production started in March 2016. The denial of the Cenvat Credit was set aside by the Tribunal, which held in Para 6 of the judgment that without use of the services in question, the factory would not have come up and no manufacture would have been possible. c) Zydus Technologies Ltd vs. CST-2015 (39) STR 657 In this decision, the services received during the period when the Plant was being set up and before commercial production started were held to h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... llant and cleared as waste and scrap. Obviously such waste and scrap does not arise out of manufacture of excisable goods. The capital goods itself became waste and scrap after used for long time, therefore, the demand of duty on such waste and scrap on its transaction value is absolutely correct and legal. Therefore, the demand on this count is sustainable on merit. However, the appellant have strongly argued on limitation, we are convinced that the issue being interpretation of legal statute and appellant being registered under Central Excise, the suppression of fact, collusion, fraud etc. cannot by attributed on the appellant. Therefore, the demand for the extended period will not be sustainable. However, if there is any demand within a normal period in respect of waste and scrap of capital goods, the same need to be worked out and recovered by the department. 4.6 As regard the penalty, we find that since there is no malafide attributed on the part of the appellant and extended period is not invokable, the penalty is not sustainable. Moreover, the major demand was set aside on merit. Corresponding to the said demand also no penalty can be imposed. 5. As per our above discussio ..... X X X X Extracts X X X X X X X X Extracts X X X X
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