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

Cenvat credit eligibility for outsourced effluent treatment services affirmed when direct nexus with manufacturing exists, supported by precedent. Availability of cenvat credit for CETP charges hinges on characterisation as an input service and on establishing a direct nexus with manufacturing; location of the service provider outside factory premises does not by itself bar credit, a position supported by precedent cited by the respondent.