2013 (11) TMI 987

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....get fly ash from NTPCs Thermal Power Plant which is located at about 30 km. from their cement plant. The fly ash is generated in the Thermal Power Plant continuously when the coal is burnt. The appellants have installed fly ash extraction plant at the Thermal Power Plant of NTPC. By this machinery installed at the Thermal Power Plant, they extract fly ash generated by burning of coal in Thermal Power Plant and load the same in the bulk trucks by which the fly ask is transported to the Cement Plant. During the period of dispute, the appellant took cenvat credit of amounting of Rs.3,04,676/- in respect of the services of erection, installation and commissioning, repair and maintenance and insurance of the fly ash extraction plant. The depart....

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....nt. In this order, the Asstt. Commissioner observed that 'the process of extraction' of fly ash by the appellant at NTPC is a process to complete the manufacture of fly ash, as it is a process incidental or ancillary to complete the procurement of fly ash and hence, the contention of party that the process of procurement of fly ash is incidental or ancillary to the manufacture of cement is not correct. He accordingly held that the fly ash which was extracted by the appellant at the NTPCs Plant had been manufactured by them and since it is an exempted final product, the cenvat credit would to be admissible in respect of services used for erection, installation, commissioning, insurance and repair & maintenance of the fly ash extraction plan....

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....mises used for generation of electricity used in the factory for the manufacture of final product, would be admissible for cenvat credit and that in view of this, the impugned order upholding the denial of cenvat credit and upholding the confirmation of cenvat credit demand and penalty is not sustainable. 5. Shri P.K. Sharma, ld. Departmental Representative, defended the impugned order reiterating the findings of the Commissioner (Appeals) and pleaded that the appellants activity at Thermal Power Plant amounts to manufacture of fly ash, that extraction of fly ash by the machinery installed by the appellant from the plant of NTPC is an activity incidental or ancillary to manufacture of fly ash and hence the fly ash which was extracted by....