M/S. Hindustan Zinc Ltd vs C.C.E. Jaipur-Ii
- CitationAppeal No. E/1092/2011-EX(SM)
Ratio decidendi
The rule this decision rests on
Cenvat credit on inputs used to generate electricity that is consumed in a canteen, vocational training centre or hospital is admissible where those facilities are located within the factory premises and are maintained by the assessee under statutory obligation, as electricity so used has a nexus with the manufacture of the final product; where the location of such facilities is disputed, that question is one of fact to be settled by physical verification of the site before the credit can be allowed or denied. Where the assessee has submitted a revised chart of quantification of admissible credit, the adjudicating authority must consider that chart on remand, and the quantum of any demand for denial of credit must be re-determined on its basis rather than on the earlier computation.
Written by Miss Lucy from the judgment below, not taken from a headnote.
Judgment
As delivered
[Arising out of Order-in-Appeal No. 13(CB)CE/JPR-II/2011 dated 07.02.2011 by the Commissioner of Central Excise (Appeals), Jaipur-II].
For approval and signature:
Honble Mr Ashok Jindal, Member (Judicial)
1 Whether Press Reporters may be allowed to see the Order for publication as per Rule 27 of the CESTAT (Procedure) Rules, 1982?
2 Whether it should be released under Rule 27 of the CESTAT (Procedure) Rules, 1982 for publication in any authoritative report or not?
3 Whether Their Lordships wish to see the fair copy of the Order?
4 Whether Order is to be circulated to the Departmental authorities?
M/s. Hindustan Zinc Ltd. .Appellants
Vs.
C.C.E. Jaipur-II .Respondent
Appearance:
Shri H. Bajaj, Advocate for the Appellants
Shri A.K. Dhawan, DR for the Respondent
CORAM:
Hon'ble Shri Ashok Jindal, Member (Judicial)
Date of Hearing: 02.01.2015
FINAL ORDER NO.50024/2015-EX-(SM)
Per Ashok Jindal:
The appellant is in appeal against the impugned order wherein Cenvat Credit on inputs have been denied to them on the premise that they are not entitled to take Cenvat Credit on inputs which was used in generation of electricity which in turn used for vocational training centre, canteen and hospital. As these are not the part of their factory for manufacturing the final product.
2. Heard the parties.
3. The contention of the Ld. Counsel for the appellant is that vocational training centre, canteen and hospital are located in the factory premises only and they are under statutory obligations to maintain the Vocation Training institute for training of their employee, the canteen to provide subsidized food and hospital for their medical facilities. Therefore, the electricity used in these places is having a nexus with the manufacturing activity of final product. Therefore, they are entitled to take Cenvat Credit on these inputs. To support his contention he relied on the decision in the case of C.C.E. Mumbai Vs. Bajaj Auto Ltd.-2011 (272) E.L.T. 308 (Tri-Mumbai) wherein this Tribunal held that gas cylinder used in canteen having a nexus with manufacturing activity of the assessee and Cenvat Credit was allowed.
4. On the other hand Ld AR opposes the contention of the Ld. Counsel and submits that the vocational training centre, canteen and hospital are located outside the factory premises. Therefore, they are not entitled to take Cenvat Credit on the inputs which were used in the generation of electricity which in turn was used for the running of the above said institutes. He further submits that initially the appellant has given a chart showing transmission of loss and whatever loss incurred by them is not entitled to take Cenvat Credit. Therefore, they are not entitled to take Cenvat Credit.
5. Considered the submission by the parties and perused the record. On perusal of the records, I find that Ld. Commissioner (A) earlier remanded the matter back to the Adjudicating Authority to reconsider the revised chart submitted by the appellant for admissibility of Cenvat Credit. The said chart has not been considered in remand proceeding by both the lower authorities. Therefore, the matter needs considerations by the Adjudicating Authority to quantify the demand on the basis of revised chart. Further, I find that the electricity has been used in vocational training centre, canteen and hospital which were maintained by the appellant as claimed by them are located within their factory premises. And they are under statutory obligations to maintain the canteen and the hospital. The location of these institutes is a matter of verification. If these institutes are located within the factory, in those circumstances appellant is entitled to take Cenvat credit on the inputs used in the generation of electricity which in turn was used while running of the institutes like vocation training centre, canteen and hospital located within the factory.
6. As discussed above, the location of the institutes is required to be verified and demand for denial of Cenvat Credit is to be re-quantified on the basis of the revised chart. Therefore, the matter needs examination at the end of Adjudicating Authority. In these terms, I set aside the impugned order and remand the matter back to the adjudicating authority to decide that issue mentioned herein above on physical verification of the site and examining the revised chart produced by the appellant.
7. Appeal is disposed off in the above terms. It is pertinent to mention here that a reasonable opportunity of being heard be given to the appellant to present their case.
(Dictated and pronounced in the open court)
(Ashok Jindal) Member (Judicial)
Bhanu
2
E/1092/2011-EX(SM)
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