M/S. Dcw Ltd vs Cce, Tirunelveli

(Arising out of Order-in-Appeal Nos.38 & 39/2012 dated 4.9.2012 and Order-in-Appeal No. 41/2012 dated 20.9.2012 145/2013 dated 25.10.2013 passed by the Commissioner of Central Excise (Appeals), Madurai)

M/s. DCW Ltd. Appellant

Vs.

CCE, Tirunelveli Respondent

Appearance

Shri C. Seethapathy, Advocate for the Appellant Shri B. Balamurugan, AC (AR) for the Respondent

CORAM

Honble Shri D.N. Panda, Judicial Member

Date of Hearing / Decision: 07.10.2015

Final Order Nos. 41382-41384 / 2015

Miscellaneous applications filed by Revenue asking the assessee to go to Bombay jurisdiction of the Tribunal does not appeal to common sense when the Honble High Court of Madras has jurisdiction over the cause of action in the matter. Therefore, miscellaneous applications of Revenue are dismissed.

2. In view of dismissal of the miscellaneous applications filed by Revenue on jurisdiction issue, the other miscellaneous applications touching the jurisdiction to amend cause title stands dismissed.

3. Learned counsel submits that a common issue of claim of CENVAT credit on the inputs used for running of the Sewage Treatment Plant (STP) which is integral part of the factory where caustic soda is manufactured is involved in Appeal Nos. E/440 & 441/2012. Apart from this issue, the claim of CENVAT credit on maintenance of main road, residential colony electrical maintenance, residential telephone at Kodaikanal, painting of office building are also in question.

4. So far as CENVAT credit on the inputs used for the STP is concerned, learned counsel submits that to eradicate water pollution, it is requirement of the Pollution Control Board to have the STP to remove the effluence from the water. Tamil Nadu Pollution Control Board vide its order dated 23.12.1998 has required the STP to be set up in order to remove the water pollution. Therefore, the object of pollution control shall be defeated if CENVAT credit is not allowed on the maintenance of STP which is pre-requisite for the manufacturing activity of the appellant and a legal obligation under pollution control law.

5. So far as the CENVAT credit on different maintenance involved in Appeal No. E/441/2012 is concerned, it was submitted that these are also part of the factory for which credit should be allowed.

6. So far as Appeal No. E/442/2012 is concerned, it is submitted on behalf of the appellant that input were used for the purpose of windmill operation to generate power and part with the same to the Electricity Board to avail equivalent quantum of power at the place of manufacture. He also submits that Tribunal has recently considered this issue and allowed relief to the assessee. Therefore, appellant is also entitled to the CENVAT credit thereon.

7. Revenue opposes the entire submission made by learned counsel for appellant on the ground that the STP was not an integral part of the factory or manufacturing which prevents the appellant to claim CENVAT credit on the input used in the maintenance of such plant.

8. Heard both sides and perused the records.

9. So far as maintenance of STP is concerned, it was a requirement of the Pollution Control Board to set up the plant for affluent treatment and water which being scarce may be made free from pollution for reuse thereof without being used for human consumption. Pollution Control Board permits set up of such plant for effective utilization of the water resource which cannot be ignored. Therefore, it cannot be said that the STP is not the integral part of the factory as well manufacturing activity to manufacture caustic soda. Removal of effluence being one of the requirement of effective utilization of water for the factory through recycling process, denial of CENVAT credit for the maintenance of STP would be unreasonable. Therefore, appellant succeeds on this point and respective CENVAT credit claimed on such count is allowed.

10. So far as the maintenance of main road, residential colony electrical maintenance, residential telephone at Kodaikanal, painting of office building are concerned, there is no nexus thereof to the manufacturing operation for which the appellant is not entitled to CENVAT credit on the service tax paid to avail such services.

11. So far as the maintenance of the windmill is concerned, a windmill owner generating power at the source of wind may not have factory at the same place. Therefore, they exchange power generated by them with the Electricity Board at the point of generation for getting equivalent power at their place of manufacture. This aspect was recognized in a batch of cases decided by Tribunal as reported in Aluminimum Powder Co. Ltd. & Ors. Vs. CCE, Mdu. & Ors  2015-TIOL-1615-CESTAT-MAD. Therefore, appellant is entitled to relief of the CENVAT credit on maintenance of windmill finding no discrepancy by Revenue that inputs were not used for windmill operation.

12. In the result, Appeal No. E/440 & 442/2012 are fully allowed and Appeal No. E/441/2012 is partly allowed.

13. Learned counsel submits that there may be consequential relief that arises out of the above decision of the Tribunal for which appropriate relief may be granted. The authority shall grant appropriate consequential relief in accordance with law.

(Dictated and pronounced in open court)

(D.N. Panda) Judicial Member

Rex

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