TMI Blog2024 (1) TMI 246X X X X Extracts X X X X X X X X Extracts X X X X ..... the effluent treatment of waste is necessary for overall manufacturing activity of the industrial unit. This issue has been considered in the various judgments - reliance placed in the case of INDIAN FARMERS FERTILISER COOP. LTD. VERSUS CCE., AHMEDABAD [ 1996 (7) TMI 141 - SUPREME COURT] where it was held that It is held that the raw naphtha used to produce ammonia which is used in the water treatment, steam generation, inert gas generation and effluent treatment plants of the urea plant of the appellants is entitled to the exemption provided by the Exemption Notification No. 187/61 as amended from time to time. The revenue s claim that since the service was availed beyond the place of removal, credit is not admissible completely fails and, on that ground, credit cannot be denied. The appellant is legally entitled for availment of Cenvat credit in respect of effluent treatment service - Hence, the impugned order is set aside - Appeal is allowed. - MR. RAMESH NAIR , MEMBER (JUDICIAL) AND MR. RAJU, MEMBER (TECHNICAL) Shri Prakash Shah, Mihir Mehta Shri Mohit Rawal Advocate for the Appellant Shri Rajesh K Agarwal, Superintendent (AR) for the Respondent ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... reatment of waste is not related to manufacture of final product, therefore, it does not have nexus with the manufacturing activity of the appellant. We do not agree with this contention of the Revenue for the reason that as per the pollution control act, it is mandatory for every industrial unit to treat the effluent waste generated during the manufacture of final product, therefore, the industrial unit cannot carry out the production without compliance of pollution control norms which includes effluent treatment of waste generated during the manufacturing activity. Therefore, the effluent treatment of waste is necessary for overall manufacturing activity of the industrial unit. This issue has been considered in the various judgments as follows: - a) Indian Farmers Fertilizer Cooperative Ltd vs. Collector, - 1996 (86) ELT 177 (SC) : 9. That leaves us to consider whether the raw naphtha used to produce the ammonia which is used in the effluent treatment plant is eligible for the said exemption. It is too late in the day to take the view that the treatment of effluents from a plant is not an essential and integral part of the process of manufacture in the plant. The emphasis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pted production of the final product in the appellant s factory therefore, it can be conveniently draw the conclusion that the effluent treatment activity is a vital part of overall manufacturing of the final product if this be so then the input services used for effluent treatment are admissible input service. This issue is no longer res-integra as in the various judgments the services related to effluent treatment has been held as admissible input service and cenvat credit was allowed. Some of the judgments are cited below:- In case of M/S KANORIA CHEMICALS INDUSTRES LTD (supra) this tribunal dealt with the similar fact and passed the following order:- 4. Heard both the sides and perused the case records. The issue involved in the present appeal is whether certain pollution control services availed by the appellant are eligible to CENVAT Credit under CENVAT Credit Rules 2004 or not. Revenue filed this appeal on the ground that the activities in relation to business have been deleted from the definition of input services during the relevant period. It is observed from the permissions granted by Gujarat Pollution Control Board under The Water (Prevention And Control of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e factory is a statutory requirement for the treatment of polluted water. With regard to Garden Maintenance Services too, I find that the same is required as per the guidelines of the PCB for the purpose of a better work atmosphere. Further, I find that this issue stands decided by a plethora of decisions including the decision of the Hon ble Madras High Court in the case of Wipro Ltd. Vs. Commissioner of C.Ex., Pondicherry 2018 (10) G.S.T.L. 172 (Mad.) wherein the jurisdictional High Court has held that Housekeeping and Landscaping Services were entitled to CENVAT Credit of service tax paid on them. In the light of the discussions made hereinabove, I am of the view that the appellant has rightly availed Credit on Water Treatment Service and Garden Maintenance Service for which reason I set aside the demand raised on this count. 10. To sum up: (i) Demand on Rent-a-Cab Service for the period from April 2008 to March 2009 is set aside; (ii) Demand on Rent-a-Cab Service for the period from December 2011 to October 2012 is upheld with interest thereon; (iii) The demand raised on Water Treatment Service and Garden Maintenance Service for the period January 2015 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ree Hundreds and Seventy Four Only), it is not clear from the impugned order of the Commissioner (Appeals) that as to whether the same is denied on the ground of procedural lapses or on the ground that the duty does not stand deposited by the service provider with the department. It is also seen that the appellate authority has observed that the issue of non-payment of Service Tax by service provider was raised in the Audit. Whether this was the audit of present appellant or of the service provider is not clear. As such, I would like the Commissioner (Appeals) to decide the said issues afresh after taking note of various decisions of the Tribunal relied upon by the appellant before me. 4. In view of the above, the demand of Rs. 1,01,797/- (Rupees One Lakh, One Thousand, Seven Hundreds and Ninety Seven Only) along with interest and penalty of identical amount is set aside. In respect of other issues, the matter is remanded to Commissioner (Appeals), for fresh consideration. 5 . The appeal is disposed off in above manner. The similar issue related to effluent treatment plan has been dealt with in detail by the Hon ble Supreme Court in the case of INDIAN FARMERS ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Co. Ltd. v. Sales Tax Officer, Kanpur and Another - 1965 (1) SCR 900. It was there held, The expression in the manufacture takes in within its compass, all processes which are directly related to the actual production . In Collector of Central Excise, New Delhi v. M/s. Ballarpur Industries Ltd. - (1984) 4 SCC 566, the respondent manufactured paper and paperboard, in the processes relating to which sodium sulphate is used in the chemical recovery cycle of sodium sulphate which forms an essential constituent of sulphate cooking liquor used in the digestion operation . The Exemption Notification concerned provided exemption to goods which had used as raw material or component parts any goods (inputs) falling under Item 68 of the First Schedule to the Act from so much of the excise duty leviable thereon as was equivalent to the excise duty paid on the inputs. The Court quoted what had been said in Dy. CST v. Thomas Stephen Co. Ltd., namely, Consumption must be in the manufacture as raw material or of other components which go into the making of the end-product ......... and observed that, correctly apprehended, that statement did not lend itself to the understanding that for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2013(32) STR 532 (Bom.) where in it was held as under: - 5. Now at the outset it must be noted that Rule 3(1) allows a manufacturer of final products to take credit inter alia of Service Tax which is paid on (i) any input or capital goods received in the factory of manufacturer of the final product; and (ii) any input service received by the manufacturer of the final product. The subordinate legislation in the present case makes a distinction between inputs or capital goods on the one hand and input services on the other. Clause (i) above provides that the Service Tax should be paid on any input or capital goods received in the factory of manufacture of the final product. Such a restriction, however, is not imposed in regard to input services since the only stipulation in clause (ii) is that the input services should be received by the manufacturer of the final product. Hence, even as a matter of first principle on a plain and literal construction of Rule 3(1) the Tribunal was not justified in holding that the appellant would not be entitled to avail of Cenvat credit in respect of services utilized in relation to ammonia storage tanks on the ground that they were situated ou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... were used by the appellant whether directly or indirectly, in or in relation to the manufacture of final products. The appellant, it is undisputed, manufactures dutiable final products and the storage and use of ammonia is an intrinsic part of that process. 6. For these reasons, we have come to the conclusion that the judgment of the Tribunal is ex facie unsustainable. The questions of law as framed are accordingly answered in the negative. The appeal is accordingly allowed. 7. There shall be no order as to costs. 4.2 Similarly, the ratio has been laid down in the following cases: - C.C.E Cus., Aurangabad vs. Endurance Technology Pvt Ltd 2017 (52) STR 361 (Bom.) Huhtamaki PPL Ltd vs. Commissioner of C.Ex. ST., Surat -I 2021 (50) GSTL 309 (Tri. Ahmd) Commr. Of C. Ex., Vadodara II vs. Siemens Healthcare Diagnostics Ltd 2014 (36) STR 192 (Tri. Ahmd) 4.3 In view of the above judgments, the revenue s claim that since the service was availed beyond the place of removal, credit is not admissible completely fails and, on that ground, credit cannot be denied. 5. As per our above observation and finding, the appellant is legally entitled for ava ..... X X X X Extracts X X X X X X X X Extracts X X X X
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