Case Law Details
Shyam Metalics & Energy Limited Vs Commissioner of CGST & CX (CESTAT Kolkata)
The issue required to be decided in the present appeal is as to whether the services obtained by the appellant for removal of coal fly ash from the captive power plant which is used for generation of power, which in turn, is captively consumed for manufacture of excisable goods, can be held to be an eligible cenvatable input service. As is seen from the submission of the appellant the removal of coal fly ash from captive power plant is a necessity and without such removal, the captive power plant cannot As such, removal of coal fly ash is admittedly connected with the production of power, which in turn, has nexus with the manufacturing of the Appellant’s final product. Revenue’s objection is that since the coal fly ash is non-excisable item, removal of the same cannot be held to be an input service, cannot be appreciated, inasmuch as the admissibility of the input service credit is not dependent upon the product, in respect of which services are availed, to be excisable or non-excisable. Admittedly the Appellant’s final product was excisable and was cleared on payment of duty. In fact, the Appellant had been duly discharging appropriate Excise Duty on clearance of the Ash considering it as a finished product under the Central Excise Act, 1944.
CESTAT note that the impugned order clearly records that the Appellant has undertaken various activities of removal/disposal of Fly Ash in terms of mandate of Ministry of Environment and Forest. He also recorded that while process is to fulfil action being environment friendly, however, he proceeded to record removal of Fly Ash to protect environment is not on account of manufacture of finished goods. I note that removal and disposal of Fly Ash in a manner prescribed by the Government is a mandate requirement for continued production of electricity for activities used by the Appellant. In other words, without such due disposal of Fly Ash, generation of electricity cannot happen.
In view of these facts, it is not correct to say that the removal and disposal of Fly Ash is nothing to do with the manufacture of excisable goods. Admittedly, the electricity generated is captively consumed by the Appellant. Any input services or inputs used for such generation of electricity are necessarily to be considered as input service for final excisable goods. In view of these facts, I find that the impugned order cannot be sustained on merit, regarding denial of various input services or credit with reference to removal and disposal of Fly Ash is mandate of law.
FULL TEXT OF THE CESTAT KOLKATA ORDER
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