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TMI Blog2023 (10) TMI 729X X X X Extracts X X X X X X X X Extracts X X X X ..... 50 MW 'captive power plant' installed for consumption in the factory, found the respondent herein to be entitled to credit without any truncation. It is common ground that the entire production of steam and bulk of electricity were utilized in manufacture of various excisable goods. However, vide power purchase agreement (PPA) of the appellant with PTC India Ltd dated 24th April 2009, the appellant had been supplying excess production to the Tamil Nadu Electricity Board (TNEB) and the notices proposed recovery of credit proportional to such sale for the period in dispute. 2. It would appear that M/s DCW Ltd had, while commissioning of their 'iron oxide' plant was under way, found themselves with surplus power that they sought to 'wheel' gainfully to the grid and the original authority confirmed the proposals in the notices by recourse to rule 6 of CENVAT Credit Rules, 2004. The acceptance of the plea of the assessee with the finding that '13. .... (e) Sub rule (5) of rule 6 of CENVAT Credit Rules, 2004 has outlined the various categories of input services on which the assessee can avail the entire amount of credit even if some quantity of the same is used in the manufacture o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s, but it also covers all activities relating to the business of manufacture. The scope of term 'input service' as defined in rule 2(1) of the CENVAT Credit Rules, 2004 has been spelt out by the Hon'ble High Court in the case of Ultratech Cement reported in 2010 (20) STR 577 (Bom.) and The Hon'ble High Court, in the case of COCA COLA INDIA PVT. LTD. vs. COMMISSIONER OF C.EX., PUNE-lll 2009 (15) S.T.R. 657 (Bom.) has interpreted the term 'Business'. On a combined reading of the ratio of the two judgments it is evident that the term 'activities relating to business' cover all the business activities and the CENVAT credit of all services which are required for the activities of Business is eligible. 15. I, therefore, hold that the CENVAT Credit of the Service Tax paid on the 'maintenance service and GTA service' used for the cogeneration plant corresponding to the electricity sold, is admissible to the Appellants. I do not find any merit in the adjudicating authority's contentions that the Appellants are liable to pay back the credit of the Service Tax paid on the input service correspondingly used in the generation of excess units of elec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y the Central Board of Excise & Customs (CBEC) issued from F No. 137/203/2007-CX4. 5. We also find that, as pointed out by Learned Counsel for the respondent, that the decision of the Hon'ble High Court of Chhattisgarh in Union of India v. HEG Ltd [2012 (275) ELT 316 (Chhattisgarh)] has held that '10. The Tribunal referring to its decision in the case of Kothari Sugars (supra) wherein it has been held that steam generating boiler parts used in captive power plant and partly sold out to Tamil Nadu Electricity Board are eligible to Cenvat Credit under Rule 57R of the erstwhile Central Excise Rules, 1944, allowed the appeal of the respondent and held that there was no reason to deny modvat credit to the respondents. Rule 2(b) defines capital goods used in the factory of the manufacturer of the final products, but does not include any equipment or appliances used in an office whereas, Rule 2(g) defines input as all goods used in or in relation to the manufacture of final products whether directly or indirectly and whether contained in the final product or not. In the present case, it is not in dispute that Cenvat Credit has been claimed against the spare parts used in boilers of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rmed along with interest and also by imposing penalties. xxxxxxx 5.1 The appellant has availed credit of Service Tax paid on the services falling under Section 65(105)(zzg). From sub-rule (5) of Rule 6 (extracted supra) in respect of the said services, the credit can be availed even if the part of the service is used in relation to manufacture of exempted goods. There is no stipulation that the services should be availed exclusively in the manufacture of dutiable goods. Therefore, there is merit in the appellant's contention in this regard. In the case of HEG Ltd. (supra), a similar issue arose in respect of capital goods which were used in manufacture of dutiable as well as exempted goods and the Hon'ble High Court held that capital goods used partly in the manufacture of dutiable goods and partly in the manufacture of exempted goods, capital goods credit cannot be denied. The same logic would apply in respect of interpretation of sub-rule (5) of Rule 6 also. Thus, the appellant is rightly entitled to take credit on 'Management, Maintenance or Repair Services' as provided under sub-rule (5) of Rule 6 of Cenvat Credit Rules, 2004.' 6. It is also on record that the Tribunal in L ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r the show cause notice dated 9-5-2011 states that Rule 6 of Cenvat Credit Rules, 2004 is not applicable in the present case. Therefore, the said show cause notice did not make out a case for invocation of provisions of Rule 14 of Cenvat Credit Rules, 2004. Therefore, show cause notice was not sustainable for the reasons that the contention in the show cause notice did not allow recovery of Cenvat credit under Rule 14 of Cenvat Credit Rules, 2004. Therefore, the proposal for recovery of Cenvat credit, interest on the same and penalty is not sustainable. We, therefore, set aside the impugned Order-in-Original and allow all the appeals. The appellant shall be entitled to consequential relief, if any, in accordance with law.' which renders the proposal in the show cause notice to be without authority of law. 7. It is seen that the reviewing authority has placed emphasis on '(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, up to the place of removal, and incl ..... X X X X Extracts X X X X X X X X Extracts X X X X
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