2017 (8) TMI 1329 - AT - Service Tax

Appellant wins Cenvat credit for waste disposal services in manufacturing process

M/s. Tube Investment of India Ltd. Versus CST, LTU, Chennai

The Tribunal ruled in favor of the appellant, allowing them to avail Cenvat credit for service tax paid on the disposal of hazardous waste and chemical ... CENVAT credit - input services - services rendered by TNWML for disposal of hazardous waste and chemical sludge generating during the course of manufacture - Rule 2 (l) of CCR - Held that: - Various Courts have held that the term ‘in or in relation to’ as mentioned in the definition of the input service is very wide and expensive and any work done in connection with the manufacture and clearance of the final product, whether used directly or indirectly is cenvatable - In the case of India Pesticides Ltd. Vs. CCE & ST, Lucknow [2016 (8) TMI 724 - CESTAT ALLAHABAD], it was held that emergence of hazardous waste and disposal of the same is an activity connected with the business and the same has to be held as admissible cenvatable input service - appeal allowed - decided in favor of appellant. Issues:Whether the appellant is entitled to avail Cenvat credit of service tax paid for disposal of hazardous waste and chemical sludge generated during manufacturing process.Analysis:The appellant, engaged in manufacturing steel strips and tubes, availed Cenvat credit of Service Tax paid on services for disposal of hazardous waste and chemical sludge. The Revenue challenged this claiming the appellant was not entitled to such credit. The main issue was whether these services fall under the definition of input service as per Rule 2(l) of the Cenvat Credit Rules. The Tribunal noted that the term 'in or in relation to' in the definition of input service is broad and inclusive. It was established in various decisions that any work related to the manufacture and clearance of final products, whether used directly or indirectly, is eligible for Cenvat credit. Notably, the emergence and disposal of hazardous waste is considered an activity connected with the business and hence qualifies as an admissible cenvatable input service. This principle was upheld in previous Tribunal decisions cited in the judgment.The Tribunal found that the issue had been settled by previous decisions and ruled in favor of the appellant. Following the precedent set in those cases, the impugned orders were set aside, and the appeals were allowed with consequential relief granted to the appellants. The judgment emphasized the importance of considering activities related to the manufacturing process as eligible for Cenvat credit, especially when they are essential for compliance with pollution control norms and maintaining the manufacturing process.