cenvat credit on the input used for effuilant treatment plant

[sukhvinder singh]

Dear Sir ,

We are manufacturing the chemicals and while prossesing of the material , some effuilent are arise , for the treatment of the same we are using some input and steam in our effuilent treatment plant (ETP) , as per the excise authority , these material are not used  in the manufacturing activity hence credit not allowed therefore we are not availing the credit .

Please clear the same ,so that we can save a big amount with the respective notification , circular or case law

Thanks

[Snehal Kulkarni]

Refer the definatin of Input under CCR 2(K)(I).

As well as the Effulant Treatment Plant treatment is not related with manufacturing of the Final Product. 

Also please refer to recent budget change, wherein it is clarified that the Cenvat Credit is not admissible on  " Inputs which are no relation to manufacture"

So in our opinion,it will be cost to you.

[YAGAY andSUN]

Dear Sukhvinder,

Inputs used in effluent treatment plant are eligible for CENVAT credit : -  In Indian Farmers Fertilisers Coop Ltd. v CCE -86 ELT 177 (SC) =AIR 1996 SC 2542 = 1996 (5) SCC 488 = 15 RLT 498, it has been held that treatment of effluents is an essential and intergral part of the process of manufacture of plant.  The apparatus used for such treatment of effluents in a plant manufacturing a particular end-product is part and parcel of the manufactruing process.  Hence, inputs used in the effluent treatment plant will be treated as 'used in the manufacture'.  It was also held that inputs used indirectly in the manufacture will also be in the manufacture.  It is not essential that ot qualify itself as raw  material, it had necessailyu and in all cases to go into and be found  in the end-product.

Chemicals used in effluent treatment plant is input for CENVAT credit - CCE v Madras Aluminium (2008) 226 ELT 342 (Mad HC DB).

Thanks and Best Regards,

Pradeep Khatri

 

AI Summary

Cenvat credit on effluent treatment inputs affirmed when treatment is integral to the manufacturing process, despite contrary administrative view. Whether inputs and consumables used in an effluent treatment plant attached to a manufacturing unit qualify as inputs eligible for Cenvat credit when ETP treatment is treated as essential and integral to the manufacturing process; reported case law holds that apparatus and chemicals for effluent treatment are part and parcel of manufacture, while administrative/budgetary clarification asserts credit is not admissible on inputs having no relation to manufacture.