2016 (7) TMI 769

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....use notice dt. 05/05/2008 was issued to appellant for irregular availment of CENVAT credit of Rs. 29,69,276/taken on boilers, WTP and proposed recovery of the said amount along with interest and penalty under Rule 15(2) of CENVAT Credit Rules, 2004 (CCR, 2004) read with Section 11AC of Central Excise Act, 1944 (CEA, 1944). The original authority vide Order-in-Original No. 16/2009/JC/Hyd.-lll. Adjn dt. 31/03/2009 dropped the demands for CENVAT credit and interest but imposed a penalty of Rs. 30,000/- under Rule 15 of CCR, 2004. Aggrieved by the Order-in-Original dt. 31/03/2009, the department filed an appeal before the Commissioner(Appeals) on the grounds that the said WTP was not installed in appellant's premises. The Commissioner(Appea....

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....space, it was installed in the premises of GAIPL. The appellant then entered into lease agreement dt. 01/02/2008 with GAIPL under which monthly rent is paid to GAIPL for leasing the space/premises where WTP is installed. The counsel explained through a rough lay out plan that the WTP installed in GAIPL and the WHRB installed within the appellant's factory are connected with pipes. Water is required to cool waste gases which are put into WHRBs. This water is fed into WHRB from the WTP. If hard water is fed without treatment, then scales of salts of Magnesium and Calcium would be formed and WHRB will get corroded. The hard water is first treated in WTP before being fed into WHRB through pipelines. In the WHRB, while waste hot gases are co....

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....as rightly disallowed the credit on WTP. 6. The learned counsel for appellant stressed on the word 'precincts' used in the definition of factory. He drew support from the judgment laid in South Eastern Coal Fields Ltd. Vs. CC&CE, MP [2006(200) ELT 357 (SC)] where it is observed as under:- 24. In other words, we have to interpret the word 'precinct' in the exemption notification to mean the surrounding region or area, as defined in Collins English Dictionary or the surroundings or environs of a place as defined in the New Shorter Oxford English Dictionary. This is because the purpose of the exemption notification is to grant exemption from excise duty to goods produced in a mine so as to encourage the mining industry. A ....

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.... the Power Plant is used, to generate electricity, to manufacture the goods in the appellant's Coke Woven Plant, which is not disputed. Capital Goods credit would be eligible. We find therefore no reasons to uphold the order of the Commissioner to deny the capital goods credit. 11. That the power generated, in the power plant of KMCL, is meant for use by NINL, would not disentitle the credit, since power cannot be stored. It has to be rolled out and gainfully utilized. Rolling out of power is a technological necessity. The said decision clarifies and covers the issue at hand. Undeniably the WTP is an essential part of the manufacturing process undertaken by appellants. Further the definition of factory as contained in Secti....