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<!DOCTYPE html PUBLIC "-//W3C//DTD XHTML 1.0 Transitional//EN" "http://www.w3.org/TR/xhtml1/DTD/xhtml1-transitional.dtd"> <html xmlns="http://www.w3.org/1999/xhtml"> <head> </head> <body> <div style="font-family:Verdana, Geneva, sans-serif; font-size:12px; text-align:justify"> <table width="800" border="0" style="border:1px solid #ccc;padding:5px;" align="center" cellpadding="6" cellspacing="0"> <tr> <td align="left" valign="top"> Customs, Excise and Service Tax Appellate Tribunal Any activity which is directly or indirectly in relation to manufacture would be eligible for credit MANU/CC/0068/2024 - (04 Mar 2024) </td> </tr> <tr> <td align="left" valign="top">Petro Araldite Private Limited vs. The Commissioner of GST & Central Excise, Chennai-I</td> </tr> <tr> <td align="left" valign="top" style="background-color:#FDEDCE">The appellant is engaged in manufacture of "Epoxy Resins and Hardeners" and holds Central Excise registration. During the course of verification of their records, it was noticed by the Department that, they have availed cenvat credit issued on invoices / debit notes issued by Tamil Nadu Petro Products Ltd. (TPL) under Business Auxiliary Service (BAS). It was observed that, there was no Effluent Treatment Plant available in the Appellant's factory and the effluent water was sent to TPL for treatment and the treated water was let out into the sea and service charges for the effluent treatment was collected from the appellant under BAS. 
 The Appellant availed service tax credit on such service tax paid by them. On being pointed out, the appellant reversed the credit to the tune of Rs.60,61,438 under protest; But, however, did not pay the appropriate interest on the same. Show cause notice dt. 5.6.2012 was issued to the appellant proposing to demand interest and for imposing penalty. After due process of law, the original authority confirmed the demand of interest of Rs.4,68,499 and imposed penalty of Rs.60,61,438. Aggrieved by such order, the appellant is now before the Tribunal. The issue is whether the appellant is eligible for the credit of service tax paid on charges collected for treatment by TPL. 
Undisputedly, the effluent treatment of the waste water (hazardous waste) is necessary in order to manufacture the goods. The Appellant cannot continue manufacturing of the goods without taking steps for effluent treatment of the waste. The department has denied the credit alleging that, the activity carried out by the appellant is an activity which is after the manufacture of goods. The decision of Maruti Suzuki Ltd. Vs CCE Delhi is with regard to the eligibility of credit availed on inputs and not on input services. It is not possible for the assessee to avail all types of input services within the factory premises. The decision of Maruti Suzuki Ltd. is not applicable to the facts of this case. 
The activity of waste water treatment is part of manufacturing activity and any activity which is directly or indirectly in relation to manufacture would be eligible for credit. The credit has been denied without valid reasons. The Appellant is eligible for credit. The impugned order disallowing the credit as well as confirming the demand and imposing penalty is set aside. Appeal allowed.</td> </tr> <tr> <td align="left" valign="top" ></td> </tr> <tr> <td align="left" valign="top" >Tags : Demand, Confirmation, Penalty</td> </tr> <tr> <td align="left" valign="top">&nbsp;</td> </tr> <tr>  <td align="left" valign="top">Source : newsroom.manupatra.com</td> </tr> <tr> <td align="left" valign="top">&nbsp;</td> </tr> <tr> <td align="left" valign="top">Regards</td> </tr> <tr> <td align="left" valign="top">Team Manupatra</td> </tr> <tr> <td align="left" valign="top">&nbsp;</td> </tr> </table> </div> </body> </html>