Cenvat credit on cement used for hazardous waste stabilisation upheld as part of mandatory pollution-control manufacturing activity.

Cement used to stabilise and dispose of hazardous industrial waste in a secured landfill was treated as an input eligible for Cenvat credit under Rule 2(k) because the waste-treatment activity was mandatory and formed an essential, integral part of the manufacturing process. The Tribunal applied its earlier view in the assessee's own matter and held that goods used for pollution-control or effluent-treatment measures necessary to carry on manufacture have the required nexus with manufacturing operations. On that basis, no reversal of credit was warranted, the impugned order was set aside, and relief was granted to the assessee.

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Issues: Whether cement used for stabilisation and disposal of hazardous industrial waste in a secured landfill qualified as an input for Cenvat credit under Rule 2(k) of the Cenvat Credit Rules, 2004.

Analysis: The cement was used for treatment and disposal of hazardous waste generated during the manufacturing operations, in compliance with environmental requirements. The Tribunal followed its earlier decision in the assessee's own case and applied the principle that goods used for pollution control or effluent treatment form an essential and integral part of the manufacturing process when such treatment is necessary to carry on the manufacture. On that basis, the use of cement for stabilisation of toxic waste was treated as directly connected with the manufacturing activity.

Conclusion: The cement qualified for Cenvat credit and no reversal was warranted; the issue was decided in favour of the assessee.

Final Conclusion: The impugned order was set aside and the appeal was allowed with consequential relief.

Ratio Decidendi: Goods used for mandatory effluent treatment or pollution-control measures that are an essential and integral part of the manufacturing process qualify as inputs for Cenvat credit.

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