2017 (11) TMI 472 - AT - Central Excise

Tribunal allows appeal, grants Cenvat credit for cement used in hazardous waste treatment

M/s Hindustan Zinc Limited Versus CCE, Jaipur

The Tribunal allowed the appeal, setting aside the order-in-original by the Commissioner, Central Excise, Jaipur. It held that the use of cement for ... CENVAT credit - input - Cement - Department was of the view that since the cement is used after the process of manufacture and is in no way connected with the manufacturing activities of the final products of the appellant, thus, it does not qualify as an input u/r 2(k) of CCR, 2004 for the manufacture of final products - Held that: - the identical issue has come up before the Tribunal in assessee’s own case for the earlier period M/s Hindustan Zinc Ltd Versus Commissioner of Central Excise And Service Tax, Jaipur [2015 (10) TMI 1558 - CESTAT NEW DELHI], where it was held that appellant has used cement for stabilization of hazardous waste 'jarosite' as toxic effluent at secured land fill which is part and parcel of their manufacturing activity. In these terms, we hold that appellant has correctly taken cenvat credit and consequently, they are not required to reverse the same - appeal allowed - decided in favor of appellant. Issues:Applicability of Cenvat Credit Rules, 2004 on the use of cement for hazardous waste treatment in manufacturing activities.Analysis:The appeal was filed against an order-in-original by the Commissioner, Central Excise, Jaipur, regarding the use of cement for hazardous waste treatment during manufacturing activities. The appellant, engaged in lead and zinc concentrates manufacturing, used cement for treating hazardous waste as per environmental regulations. The department contended that cement did not qualify as an input under Rule 2(k) of Cenvat Credit Rules, 2004. The Tribunal referred to previous cases and observed that the treatment of effluents in a manufacturing plant is integral to the manufacturing process. The Tribunal cited judgments emphasizing the importance of environmental protection and pollution control in manufacturing processes. The use of raw materials like cement for hazardous waste treatment was deemed essential for manufacturing activities.The Tribunal highlighted the case of Indian Farmers Fertilisers Coop. Ltd., where the Supreme Court held that processes integral to the production of goods qualify as part of the manufacturing process. The Tribunal also referred to the case of Monarch Catalyst Pvt. Ltd., where the use of inputs for treating harmful effluents was considered a crucial part of the manufacturing process. The Tribunal concluded that the appellant's use of cement for hazardous waste stabilization was an essential part of their manufacturing activity, entitling them to Cenvat credit. Following previous rulings, the impugned order was set aside, and the appeal was allowed. The appellant was not required to reverse the Cenvat credit taken for the use of cement in hazardous waste treatment.