TaxTMI 
TaxTMI 
2025 (1) TMI 1766
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....igible CENVAT credit of Rs.61,67,071/- availed on various machinery and components procured for setting up of the 'Neutralization plant'. 3. The brief Facts are M/s. Travancore Titanium Products Limited, the Appellants are engaged in the manufacture of Titanium Dioxide, Sulphuric Acid and Potassium Nitrate falling under the Central Excise Tariff Heading Nos.2823.00, 2807.00 and 28431.90, respectively and are availing Cenvat credit on inputs and capital goods. 4. The manufacture of Titanium Dioxide results in generation of acidic waste which was earlier being discharged directly into the sea. The discharge of acidic waste directly into the sea was restricted with the advent of Water (Prevention and Control of Pollution) Act, 1974 and the establishment of Kerala Pollution Control Board ('KPCB'). In furtherance of the Water (Prevention and Control of Pollution) Act, 1974, the Hon'ble Kerala High Court directed the Appellant to set up an effluent treatment plant. In view of the directives of the said Act and the Order of the Hon'ble Kerala High Court, the Appellant engaged M/s.VA Tech Wabag Ltd, Alwarpet ('the Contractor'), for setting up of a Neut....
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....ol equipment (iii) components, spares and accessories of the goods specified at (i) and (ii) above; (iv) moulds and dies, jigs and fixtures; (v) refractories and refractory materials; (vi) tubes and pipes and fittings thereof; and (vii) storage tank, used in (1) the factory of the manufacturer of the final products, but does not include any equipment or appliance used in an office.... 6. The learned counsel further submits that; the Neutralization plant installed at the manufacturing unit is a pollution control equipment; it has been installed in view of the guidelines of the Water (Prevention and Control of Pollution) Act, 1974 and of Hon'ble Kerala High Court; the plant is required to treat the pollutant being released from the unit i.e., the toxic water; Rule 2(a) specifically covers 'pollution control equipment' therefore the neutralization plant is specifically covered under the definition of 'capital goods'; further, the Rule 2(a)(iii) covers 'components, spares and accessories of the goods specified at (i) and (ii)' inasmuch as the components and accessories of the pollution control....
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....of Neutralization plant. 11. The learned counsel further submits that; the impugned OIO has further held that Cenvat Credit is only entitled to a manufacturer of 'final products' and the definition of 'final products' states that the same are excisable goods manufactured from 'inputs'. It has been held that since the procured goods were used in setting up of an article which is non-excisable, the Appellant is not entitled to avail Cenvat Credit on the same; the Ld. Commissioner has erred in interpreting the definitions of 'input' and 'final products'; Rule 2(h) of the CCR states that Final Products means excisable goods manufactured or produced from inputs or using input services; Further, the definition of 'input' as per Rule 2(k) states as below: Prior to 01.04.2011 (k) "input" means- (i) all goods, except light diesel oil, high speed diesel oil and motor spirit, commonly known as petrol, used in or in relation to the manufacture of final products whether directly or indirectly and whether contained in the final product or not and includes lubricating oils, greases, cutting oils, coolants, accessories of the ....
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.... Section 11A of the central Excise Act, 1944; the Show Cause Notice dated 25.10.2013 was issued for the period October 2008 to March 2012 invoking extended period; the extended period of limitation can only be invoked in case of fraud, collusion, willful misstatement or any suppression of facts, whereas, in the instant case, there is no occasion to allege any such acts on the part of Appellant; the provisions of Section 11A of the CEA pertaining to invocation of extended period cannot be used lightly by the department; there must be substantiation of the allegations pertaining to suppression, fraud, collusion etc. to invoke extended period; the department has merely alleged the suppression but the same has not been substantiated with any reasonableness; the impugned goods are used in the manufacture of the capital goods and it is settled law as propounded in the decisions relied on in the paras supra, that the inputs used in the manufacture of capital goods are eligible for credit; they have taken credit in accordance with the law laid down by the decisions and therefore invocation of longer period of limitation on the ground of intention to evade duty is not sustainable. 14. Th....
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.... not substantiated the allegations pertaining to fraud, suppression etc., penalty cannot be levied; the Appellant relies upon the judgment of Hon'ble Supreme Court in Hindustan Steel Ltd Vs. State of Orissa reported in AIR 1970 SC 253 wherein the Hon'ble Court held that penalty cannot be levied merely because its legal to do so, there must be some deliberate/positive act on behalf of the taxpayer. 17. The learned Authorised Representative (AR) for the revenue reiterated the findings in the impugned order of the Commissioner. 18. Heard both sides and perused the records. 19. The issue involved in this case is availment of ineligible cenvat credit on machinery and components used for setting up of the 'Neutralization Plant' (pollution control equipment) for the purpose of removing the toxins produced during the manufacture of Titanium dioxide being manufactured by the appellant, which was necessitated in view of advent of Water (Prevention and Control of Pollution) Act, 1974 and the establishment of Kerala Pollution Control Board. Further, the Hon'ble Kerala High Court directed the Appellant to set up an effluent treatment plant. The demand was raised on ....