Case Law Details

Case Name : Welspun Maxsteel Ltd. Vs Commissioner of Central Excise (CESTAT Mumbai)
Appeal Number : Appeal No. St/291 & 292/2012
Date of Judgement/Order : 01/06/2012
Related Assessment Year :
Courts : All CESTAT (604) CESTAT Mumbai (125)

CESTAT, MUMBAI BENCH

Welspun Maxsteel Ltd.

versus

Commissioner of Central Excise

Order No. S/217 & 218/12/Smb/C-Iv

& A/1387&139/12/Smb/C-Iv

Application No. St/S/1006 & 1007/2012

Appeal No. St/291 & 292/2012

Date of Pronouncement – June 1, 2012

ORDER

1. This appeals and stay applications are directed against the Order-in-Appeal No.US/110 & 111/RGD/2012 dated 20/02/2012 passed by the Commissioner of Central Excise (Appeals), Mumbai.

2. The short issue for consideration in this case is, whether the appellant is eligible for Cenvat credit on the security service availed by them at their pump house for pumping water, which is required as a coolant in their manufacturing operations or not.

3. The revenue’s stand is that inasmuch as the input service has been consumed outside the factory premises, they are not eligible for Cenvat credit.

4. The appellant on the other hand argues that without water, the manufacturing operations cannot be carried out and the water has to be pumped from Kundalika river, which is situated away from their factory and there is a pump house for undertaking this activity. The security services provided there is integrally connected to the manufacturing activity at the appellant’s factory and, therefore, in terms of the judgment of the Hon’ble High Court of Bombay in the case of CCE v. Ultratech Cement Ltd. 2010 (260) ELT 369, they are entitled for the credit.

5. Heard both sides.

5.1 As the issue lies in a narrow compass I take up the appeal itself for consideration and disposal after granting stay.

5.2 There is no dispute in this case as regards the facts. There is also no dispute as to the fact the water pumped from river Kundalika is used as a coolant in the manufacturing process. If that be so, the pumping of water from the banks of river Kundalika is integrally connected to the manufacturing process and the security services used therein becomes an input service in terms of the definition of input service under Rule 2(l) of the Cenvat Credit Rules, 2004. As far as the input services are concerned, by their very nature, it cannot be insisted upon that they should be provided with in the factory premises. The only condition is that the input services on which credit is taken should be integrally connected with the manufacturing activities. In this case there is no dispute on this fact. Therefore, following the ratio of the judgment of the Hon’ble High Court of Bombay in the case of Ultratech Cement Ltd. (supra) I hold that the appellant is rightly entitled for the credit of input service tax paid on security guard services at their pump house. Thus, the appeals are allowed with consequential relief. Stay applications are also disposed of.

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Category : Service Tax (3278)
Type : Judiciary (9823)
Tags : Cestat judgments (794)

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