Skip to main content

Electricity is prime/essential requirement in manufacture of goods like cement

In Prism Cement Ltd. V.  C.C.E. & S.T., Bhopal, the matter before the Customs, Excise and Service Tax Appellate Tribunal was Appellant is engaged in manufacture of cement. For manufacturing of cement, Appellant requires electricity which is used at various stages of production for conversion of raw material into final products for which Appellant entered into an agreement with Madhya Pradesh Poorva Kshetra Vidyut Vitran Company (Vidyut Company) for supply of electricity to Appellant’s manufacturing plant. Appellant also engaged Contractor for undertaking entire work of erection of dedicated Transmission line from Sitpura Sub-station to Appellant’s manufacturing factory. Appellant availed Cenvat Credit of main components of transmission line like towers or pylons made up of MS duly galvanized, aluminum conductors, insulators and was other hardware like clamp, vibration dampers, cable connectors, etc. Revenue authorities were of view that, availment of Cenvat Credit of cement, cables, etc used for erection/construction of transmission line is incorrect and coming to such conclusions, issued show cause notice for reversal of said ineligible Cenvat Credit. Adjudicating authority confirmed demand raised with interest and also imposed penalties on ground that, transmission line which is erected is immovable property and they do not appear to be capital goods or inputs used or in relation to manufacture of Appellant's final product, Vidyut Company is an independent legal entity and on construction of these transmission lines, they are property of said Vidyut Company and transmission line or parts thereof have no integral relation co-extensive with process of manufacture of Appellant final products.

It is undisputed that, transmission line which is laid is for exclusive and dedicated use of Appellant. It also cannot be disputed that, electricity is prime/essential requirement in manufacturing of cement. Items used for laying down dedicated transmission line were duty paid and duty paying documents are in name of Appellant. Adjudicating authority holding Cenvat Credit is not eligible only on ground that these goods are immovable is against law as settled by High Court of Gujarat in case of Mundra Ports and Special Economic Zone Ltd. Vs. CCE wherein it was held that, immovability of goods is not a criteria for denying the credit. In yet another case of Singhal Enterprises Pvt. Ltd. Vs. CC Raipur, this Tribunal applying ratio of user test on structural items used in fabrication of support structure allowed Cenvat Credit of duty paid on such structural items.

Adjudicating authority has also held that, transmission lines which is laid down by Appellant is bringing electricity from Sitpura which is situated 32 kms away from factory premises and is not within factory premises hence, Cenvat Credit is inadmissible. Similar issue cropped up before Tribunal in case of CCE Chennai Vs. Pepsico India Holdings Ltd. In that case, Respondent therein availed Cenvat Credit on PVC pipes which are used for drawing water from the well situated away from factory premises. Therein, Tribunal held that, since PVC pipes are used exclusively for drawing water and supplying it to factory of Respondent therein, Cenvat Credit cannot be denied. In view of facts and circumstances of present case and judicial pronouncements as relied upon, impugned order is set aside and appeal allowed.

Comments

Post a Comment

Most viewed this month

One Sided Clauses In Builder-Buyer Agreements Is An Unfair Trade Practice

In CIVIL APPEAL NO. 12238 OF 2018, Pioneer Urban Land & Infrastructure Ltd. vs Govindan Raghavan, an appeal was filed before the Supreme Court  by the builder against the order of the National Consumer Forum. The builder had relied upon various clauses of the Apartment Buyer’s Agreement to refute the claim of the respondent but was rejected by the commission which found the said clauses as wholly one-sided, unfair and unreasonable, and could not be relied upon. The Supreme Court on perusal of the Apartment Buyer’s Agreement found stark incongruities between the remedies available to both the parties. For example, Clause 6.4 (ii) of the Agreement entitles the Appellant – Builder to charge Interest @18% p.a. on account of any delay in payment of installments from the Respondent – Flat Purchaser. Clause 6.4 (iii) of the Agreement entitles the Appellant – Builder to cancel the allotment and terminate the Agreement, if any installment remains in arrears for more than 30 da...
Post a Comment
Read more

Inherited property of childless hindu woman devolve onto heirs of her parents

In Tarabai Dagdu Nitanware vs Narayan Keru Nitanware, quashing an order passed by a joint civil judge junior division, Pune, the Bombay High Court has held that under Section 15 of the Hindu Succession Act, any property inherited by a female Hindu from her father or mother, will devolve upon the heirs of her father/mother, if she dies without any children of her own, and not upon her husband. Justice Shalini Phansalkar Joshi was hearing a writ petition filed by relatives of one Sundarabai, who died issueless more than 45 years ago on June 18, 1962. Article referred:http://www.livelaw.in/property-inherited-female-hindu-parents-shall-devolve-upon-heirs-father-not-husband-dies-childless-bombay-hc-read-judgment/
Post a Comment
Read more

Court approached in the early stages of arbitration will prevail in all other subsequent proceedings

In National Highway Authority of India v. Hindustan Steelworks Construction Limited, the Hon'ble Delhi High Court opined that once the parties have approached a certain court for relief under Act at earlier stages of disputes then it is same court that, parties must return to for all other subsequent proceedings. Language of Section 42 of Act is categorical and brooks no exception. In fact, the language used has the effect of jurisdiction of all courts since it states that once an application has been made in Part I of the Act then ―that Court alone shall have jurisdiction over arbitral proceedings and all subsequent applications arising out of that agreement and arbitral proceedings shall be made in that Court and in no other Court. Court holds that NHAI in present case cannot take advantage of Section 14 of the Limitation Act, 1963 for explaining inordinate delay in filing present petition under Section 34 of this Act in this Court.
Post a Comment
Read more