TaxTMI 
TaxTMI 
2022 (11) TMI 42
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....iced that the respondent has availed CENVAT credit of lease rentals paid to M/s. Ashok Leyland Wind Energy Ltd. They had taken lease of 27 windmills from M/s. Ashok Leyland Wind Energy Ltd. located in Udumalpet, Coimbatore District. The said company was responsible for development, maintenance and operation of the windmills and for effective functioning of the same. The energy generated by these windmills was surrendered to the power grid at Udumalpet and in turn the same quantum of electricity was supplied to the respondent at Chennai. On perusal of the lease agreement, it was seen that the lease rental is computed on the actual power consumed by respondent on agreed rates. The respondent availed credit of the service tax paid on the lease....
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....et is being drawn by the respondent at Chennai TNEB power grid. This is very clear from the lease agreement and therefore the credit availed is legal and proper. He relied upon the decision of Hon'ble jurisdictional High Court in the case of CCE Vs. Ashok Leyland Ltd. reported in 2019 (369) ELT 162 (Mad.) to argue that on very same issue, the Hon'ble High Court has held that input service credit is eligible. The Hon'ble High Court has taken the view that there is no necessary that the windmill has to be situated in the place of manufacture. He prayed that the appeal may be dismissed. 4. Heard both sides. 5. The issue is whether the credit availed on the service tax paid on lease rental charges paid to the Ashok Leyland Wind En....
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....entered into an agreement with the Tamil Nadu Electricity Board (TNEB) for generation of power through the windmills and transmit the same to the TNEB grid and the TNEB, in turn, would transmit the power agreed to the factory premises of the assessee. The assessee was paying lease rentals for the windmills operated on lease basis and operations, and maintenance charges for the windmills owned by them and availed Cenvat credit on service tax paid on lease rentals and operations and maintenance charges. The Assessing Officer issued show cause notice dated 13-11-2007 setting out the facts and referred to Rule 2(l)(ii) of the Rules, which defines "input service" and pointed out that so far as generation of electricity through windmills is conce....
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....ispute the fact that the assessee had drawn equal quantity of electricity from the TNEB grid equivalent to the amount which it had generated through windmills and supplied to the TNEB. Therefore, we are not required to go into the question as to whether there was any excess energy generated, whether it was sold to third parties or whether the assessee had sold it to the Electricity Board on costs, etc., and these issues become hypothetical in the instant case because, there is no such allegation against the assessee on any excess generation than what was utilised. The only allegation against the assessee is with regard to the fact that the windmills are located far away from the manufacturing unit. Undoubtedly, the windmills cannot be locat....