2008 (9) TMI 575

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....affirmed in the impugned order. The appellants M/s. Pallipalayam Spinners Pvt. Ltd (PSPL) are engaged in the manufacture of viscose yarn, poly viscose yarn etc. They had availed MODVAT credit of duty paid on a gear box used in their windmill located at Tirunelveli, about 500 kms away from Salem where the appellant's factory is situated. The appellants incurred expenditure towards repair and maintenance of the windmill under an AMC. PSPL had availed credit of the service tax incurred on maintenance and repairs of the windmill. During the material period, the appellants had also taken credit of service tax incurred by it towards premia on workers' welfare policy as well as passengers carrying policy. Adjudicating the perceived contravention o....

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.... generated in the windmill was available to the appellant's factory by an arrangement with the TNEB. The power generated is transferred to the TNEB grid and the same was available as a credit/currency against which equal amount of power is supplied to the appellant's factory at Salem. It is her submission that the location of the windmill away from the factory should not stand in the way of the appellant-factory's entitlement to credit of duty on capital goods used in setting up and operating the windmill. The same argument has been advanced as regards admissibility to credit of service tax paid on maintenance and repair service for maintaining the windmill in the account of the assessee mill. The taxing statutes and reforms keeping pace wi....