Commissioner Of Central Excise, ... vs M/S. L.G. Balakrishnan & Bros. Ltd
- CitationAppeal No.CMB-CEX-000-APP-319 to 321-13, all dated 24.09.2013 passed by the Commissioner
Ratio decidendi
The rule this decision rests on
The Tribunal's reasoning rests on the following: where the generation of wind energy at a windmill is undisputed to be for the purpose of sharing that energy with the Electricity Board in exchange for an equivalent quantum of power at the place of manufacture under a barter arrangement, and the installation and maintenance of the windmill are inevitable for that generation, the windmill's energy generation and its maintenance are treated as connected with the manufacture of goods or provision of service, so that the Revenue's appeal against allowance of input credit on inputs and input services used in such windmills cannot be sustained absent any material showing that the energy was used for purposes other than manufacture or provision of service.
Written by Miss Lucy from the judgment below, not taken from a headnote.
Judgment
As delivered
[Arising out of Order-in-Appeal No.CMB-CEX-000-APP-319 to 321-13, all dated 24.09.2013 passed by the Commissioner of Customs, Central Excise & Service Tax (Appeals), Coimbatore ]
COMMISSIONER OF CENTRAL EXCISE, COIMBATORE APPELLANT
Versus
M/s. L.G. BALAKRISHNAN & BROS. LTD RESPONDENT
Appearance:
For the Appellant Shri K. P. Muralidharan, AC (AR)
For the Respondent Shri Sai Prashanth, [No vakalat on file] Adv.
CORAM:
Honble Shri D.N. Panda, Judicial Member
Date of hearing/decision 29-09-2015
FINAL ORDER NOs. 41295-41297 / 2015
There is no dispute by Revenue that the generation of power using windmill was to share the same with Electricity Board to avail the same quantum of power at the place of manufacture on barter system. There is also no dispute by Revenue that for generating power installation of windmill is required and also maintenance thereof is inevitable. Considering all these aspects in a batch of appeals in the case of India Cements Ltd. Vs Commissioner of Central Excise and Others reported in 2015 - TIOL - 982 - CESTAT - Mad. assessees had succeeded. Therefore, finding of fact in the present case not being dissimilar to the decision in the above case, all the Revenue's appeals are dismissed. It may be stated that while deciding the above reported case, the Tribunal has thoroughly recorded the fact in paras 4, 5 & 6, which is reproduced below:-
4. Power shortage is well-known to the economy. Hydro power, thermal power as well as wind energy are normally generated at a place nearness to the source of raw material. Wind energy is generated at the place where wind is available and reciprocal arrangement is made with Electricity Board for bartering the energy so generated. This is an accepted phenomena since power/energy generated cannot be stored. Places where wind energy generated is not consumable arrangement between the generator of energy and power distributing agency like electricity board is obviously made to save the power so generated and make that available at the place of manufacture.
5. Out view above is fortified from the judgment of the Honble High Court of Bombay in Central Excise Appeal No.14/2012 in the case of Commissioner of Central Excise, Aurangabad Vs Endurance Technology Pvt. Ltd., disposed on 02.12.2014. The Honble court examining the meaning of the input under Cenvat Credit Rules, 2004 and admissibility of credit of tax on such input held that there should not be inadmissibility of input credit on input or input services used by windmills to generate energy which is made available through electricity board under barter system.
6. For the reasoning above and in absence of any materials on record showing energy generate by windmills was used for the purpose other than manufacture of providing of service, all the appeals listed in the aforesaid Sl. Nos. are allowed. Consequential relief if any in these appeals shall flow in accordance with law.
In view of the above, all the appeals of Revenue are dismissed.
(Dictated and pronounced in open court)
(D.N. PANDA) JUDICIAL MEMBER
ksr 03-10-2015
DRAFT Remarks
I II III
Date of dictation 29.09.2015
Draft Order - Date of typing 03.10.2015
Fair Order Typing 03.10.2015
Date of number and date of dispatch 05.10.2015
3 E/42492 to 42494/2013
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