Input service Tax credit u/r CCR,2004

[RAMNIRANJAN KANDOI]

There is a CETP , each factory in Industrial Area has to be a member of CETP plant for secondary Treatment of effluent generated during manufacturing process.CETP recovers charges for treatment of effluent and also service tax. Unit takes credit of Service tax .Dept. is issuing SCN for 2 reasons.

a. Services by CETP is given outside factory premises.

b.There is no relation of treatment by CETP and manufacturing.

Explained everything in detail to dept, but not trying to understand and issue SCN.

Kindly throw light on this issue in detail with suitable case law.

[PAWAN KUMAR]

Dear Sir,

Service provided outside the factory premises is eleigible for cenvat credit availment and direct nexus with the manufacturing. Kindly read the case of Maharashtra Seamless Ltd. for similar facts and circumstances. Another case is of Vikram Cement (2009), GHCL Limited etc.

AI Summary

Eligibility of Cenvat Credit for Effluent Treatment Services Under Cenvat Credit Rules, 2004 Questioned; Clarification Sought A query was raised regarding the eligibility of input service tax credit under the Cenvat Credit Rules, 2004, specifically related to charges incurred by factories for effluent treatment by a Common Effluent Treatment Plant (CETP). The department issued a show cause notice (SCN) arguing that services provided by CETP are outside the factory premises and unrelated to manufacturing. A response highlighted that such services are eligible for Cenvat credit, referencing cases like Maharashtra Seamless Ltd. and Vikram Cement (2009) to support the claim. The discussion seeks further clarification and suitable case law references.