Custom, Excise & Service Tax Tribunal
M/S Ambuja Intermediates Ltd vs C.C.E. & S.T.-Ahmedabad-Iii on 31 January, 2018
CUSTOMS EXCISE & SERVICE TAX APPELLATE TRIBUNAL West Zonal Bench 2nd Floor, Bahumali Building, Nr Girdharnagar Bridge, Asarwa Ahmedabad 380 004 Appeal No. : E/11557/2017 Arising out of OIA-AHM-EXCUS-003-APP-297-16-17 dt 30/03/2017 passed by the Commissioner of Central Excise, Customs and Service Tax (Appeals) -AHMEDABAD M/s Ambuja Intermediates Ltd - Appellant(s) Vs C.C.E. & S.T.-Ahmedabad-iii - Respondent(s)
Represented by For Appellant(s) : Shri S Bissa, Advocate For Respondent(s): Mrs Nitina Nagori, Authorised Representative CORAM :
Dr D.M. Misra, Hon'ble Member (Judicial) Date of Hearing / Decision : 31/01/2018 ORDER No. A/10223 / 2018 Per : Dr D.M. Misra, Heard both sides.
2. This is an appeal filed against OIA-AHM-EXCUS-003-APP-297-16-17 dt 30/03/2017 passed by the Commissioner of Central Excise, Customs and Service Tax (Appeals) AHMEDABAD.
3. The brief facts of the case are that the appellant had availed cenvat credit on Service Tax paid on various services viz., Banking and Financial Services, Business Support Services, and Chartered Accountant Service, which were used for manufacturing activities at their factory/plant as well as for generation of electricity at Wind Mills situated outside the factory. Alleging that appellant has sold electricity to Gujarat Energy Transmission Company Ltd (GETCO), hence, 6% of the value of the electricity energy sold amounting to Rs 21,01,270/- was demanded under Rule 6(3) of Cenvat Credit Rules, 2004,; also Cenvat Credit of Rs 4,71,245/- availed on Repair and maintenance Services for their Wind Mill situated away from factory was demanded. On adjudication, the demands were confirmed with interest and penalty. Aggrieved by the said order, the appellant filed appeal before the Ld Commissioner (Appeals) who in turn, rejected the appeal. Hence, the present appeal.
4. The Ld Advocate, Shri Bissa for the appellants submits that the Ld commissioner (Appeals) has allowed the appeal to the extent of admissibility of credit of service tax paid on Repair and Maintenance Services used at the Wind Mill situated away form the factory premises, however, the Ld Commissioner (Appeals) has confirmed the demand relating to common input services used for maintenance of the Wind Mill and manufacturing activity at factory. It is the contention that once credit of service tax paid on Repair and maintenance service, used for Wind Mill is allowed there is no justification for denying credit on other common input services, used by them in manufacturing activity as well as for Maintenance of Wind Mill. He has categorically submitted that electricity generated in the wind mill is wheeled out to their locations through GETCO and no part of the electricity is sold by them to others. It is his contention that as per the agreement between the appellant and GETCO, they could park surplus electricity for a maximum period of six months and thereafter it would lapse, which clause itself indicates that they are not selling the electricity generated in the Wind Mill to either GETCO or other companies. Further, he has submitted that the electricity bill paid by the Appellant to the Gujarat State Electricity Board is more than the electricity produced at the wind mill and adjusted against the total bill indicates that the electricity generated at their Wind Mill was not sold by them.
5. The Ld AR for the Revenue reiterated the findings of the Ld Commissioner (Appeals) .
6. Heard both sides and perused the records.
7. I find that the Ld Commissioner (Appeals) had allowed Cenvat Credit of Service Tax paid on input services viz., Repair and Maintenance Service and Works Contract Services in relation to Repair and Maintenance service used for generation of electricity in Wind Mill situated away from the factory following the Larger Bench judgment in the case of Parry Engg & Electronics (P) Ltd vs CCE&ST Ahmedabad 1 2015(40)STR.243 (Tri LB), however, denied credit on other common input services used for maintenance of wind mill and also manufacturing activity. I do not find merit in denying credit on other input services common for manufacturing activity and running of the wind Mill, when credit of service tax paid on repair & maintenance service is allowed. In the show cause notice it is also alleged that the appellant had sold a part of the electricity generated in the wind mill, which the appellant had vehemently denied by producing evidences to the effect that no part of the electricity generated in the Wind Mill has been sold by them but the entire quantity is used in the factory premises of the Appellant. In support, the Ld Advocate has placed the relevant electricity bills paid by the Appellant after adjustments allowed for wheeling out of electricity to the grid of GETCO, generated at their wind mill. These evidences have not been examined. Therefore, only for the limited purpose of verification whether electricity energy generated at the Wind Mill was sold or otherwise, the matter is remanded to the Adjudicating Authority.
8. Appeal is allowed by way of remand to the facts as mentioned above.
(Dictated and pronounced in the open Court) (D.M. Misra) Member (Judicial) swami 4