Custom, Excise & Service Tax Tribunal
Welspun Maxsteel Ltd vs Commissioner Of Central Excise on 1 June, 2012
IN THE CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL WEST ZONAL BENCH AT MUMBAI COURT No. II Appln.No.ST/S/1006 & 1007/12 APPEAL No.ST/291 & 292/12 (Arising out of Order-in-Appeal No.US/110 &111/RGD/2012 dated 20/02/2012 passed by Commissioner of Central Excise (Appeals), Mumbai) For approval and signature: Honble Mr. P.R. Chandrasekharan, Member (Technical) ========================================
1. Whether Press Reporters may be allowed to see : No 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 : Yes CESTAT (Procedure) Rules, 1982 for publication in any authoritative report or not?
3. Whether Their Lordships wish to see the fair copy : Seen of the Order?
4. Whether Order is to be circulated to the Departmental: Yes authorities?
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Welspun Maxsteel Ltd., Appellant
Vs.
Commissioner of Central Excise,
Raigad Respondent
Appearance:
Shri.Wasim Qureshi, Advocate for appellant
Shri.S.R.Bhatti, Dy. Comm. (AR) for respondent
CORAM:
Honble Mr. P.R. Chandrasekharan, Member (Technical)
Date of Hearing : 01/06/2012
Date of Decision : 01/06/2012
ORDER NO
Per: P. R. Chandrasekharn
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 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 revenues 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 appellants factory and, therefore, in terms of the judgement of the Honble High Court of Bombay in the case of CCE,Nagpur Vs. Ultratech Cement Ltd., reported in 2010 (260) ELT 369 (Bom), 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 judgement of the Honble 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.
(Dictated in Court) (P.R. Chandrasekharan) Member (Technical) pj 1 3