Cheminova India Limited Vs C.C.E. & S.T.-Surat (CESTAT Ahmedabad)
CESTAT Ahmedabad held that services availed in respect of effluent treatment plant for treatment of industrial waste is in relation to the overall manufacturing activity and hence CENVAT Credit is duly admissible.
Facts- The appellant is engaged in the manufacture of pesticides and insecticides which are falling under chapter 38. For running the factory, the appellant obtained permission from Pollution Control Board under Water (Prevention and Control of pollution Act, 1974) and Air (Prevention and Control of Pollution Act, 1981).
The appellant have availed the cenvat credit in respect of the services received in relation to effluent treatment of the industrial waste. The case of the department is that the said cenvat credit is not admissible to the appellant on the ground that the effluent treatment activity is post manufacture and the same is not used in or in relation to manufacture of final product accordingly, the cenvat credit so availed by the appellant was denied therefore, the present appeals filed by the appellant.
Conclusion- Held that the issue is no longer res-integra as the services availed in respect of effluent treatment plant for treatment of industrial waste is in relation to the overall manufacturing activity of the appellant’s final product in the appellant’s factory therefore, the said services are input service hence, the credit is admissible.
FULL TEXT OF THE CESTAT AHMEDABAD ORDER
The brief facts of the case are that the appellant is engaged in the manufacture of pesticides and insecticides which are falling under chapter 38. For running the factory, the appellant obtained permission from Pollution Control Board under Water (Prevention and Control of pollution Act, 1974) and Air (Prevention and Control of Pollution Act, 1981).
02. The appellant has obtained such permission from Gujarat Pollution Control Board who has given consent letter. This permission lays down certain parameters for discharge of water and gas arise during the manufacture of chemical. As per the consent of pollution control board, the appellant is required to ensure that air and water discharge meets the parameters specified in the permission, to meet such requirements the appellant has availed the service of effluent treatment before discharge of the effluent arises during the manufacture. If the effluent is discharged without being treated then the permission granted by the Gujarat Pollution Control Board to the appellant to manufacture the goods will be cancelled and thereby they will have to stop manufacturing activity. The appellant have availed the cenvat credit in respect of the services received in relation to effluent treatment of the industrial waste.
03. The case of the department is that the said cenvat credit is not admissible to the appellant on the ground that the effluent treatment activity is post manufacture and the same is not used in or in relation to manufacture of final product accordingly, the cenvat credit so availed by the appellant was denied therefore, the present appeals filed by the appellant
04. Shri Mehul Jiwani, learned Chartered Accountant appearing on behalf of the appellant submits that the effluent treatment is mandatorily necessary to carry out the production activity as per the consent given by the Pollution Control Board, if the industrial waste arising during the course of manufacture is not treated in the effluent treatment plant and the treated water is not discharged, the permission can be cancelled and without permission the appellant cannot run the production. It is therefore, the effluent treatment activity is necessary to carry out the uninterrupted production activity of the appellant therefore, the activity is in relation to manufacture of final product. Accordingly, the cenvat credit is admissible. He placed reliance on the following judgments:-
