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CX - Cement used for treating hazardous effluent 'Jarosite' before dumping it as landfill - CENVAT credit is admissible: CESTAT

By TIOL News Service

NEW DELHI, SEPT 30, 2015: THE appellant is engaged in the manufacture of lead, zinc and sulphuric acid. During the manufacture of these products, toxic effluent 'Jarosite' is generated. As per pollution control norms, the appellant is treating the said ‘Jarosite' with cement and lime before discharging the said treated effluent as secured landfill.

During the period in dispute, the appellant availed CENVAT credit on the cement used for treating the effluent Jarosite before dumping it in the landfill.

Revenue is of the view that since exclusive use of cement was to treat the effluent and it was not used in connection with the manufacture of final product, the appellant is not entitled to take CENVAT credit on cement so used.

Several SCNs found their way and all of them were cemented by the adjudicating authority inasmuch as the allegations were upheld and the demands were confirmed along with penalty and interest.

The appellant is before the CESTAT and submits that the issue is settled long back by the Apex Court in the case of   Indian Farmers Fertilisers Coop. Ltd. vs. CCE Ahmedabad - 2002-TIOL-146-SC-CX and, therefore, the impugned orders are to be set aside.

The AR did not have anything to contribute except reiterate the findings contained in the impugned orders passed in February 2012/October 2013.

The Bench observed that i n the case of Indian Farmers Fertilisers Coop. Ltd.(supra) the Apex Court has held that the apparatus used for treatment of effluent in a plant manufacturing a particular end-product is a part and parcel of the manufacturing process of end-product.

After extracting from the aforesaid apex court decision and the Madras High Court decision in the case of   Madras Aluminium Company Ltd. - 2008-TIOL-80-HC-MAD-CX, & Monarch Catalyst Pvt. Ltd. vs. CCE, Thane-I - 2013-TIOL-780-CESTAT-MUM  the Bench concluded thus-

"9. Admittedly, in this case, the appellant has used cement for stabilization of hazardous waste 'jarosite' as toxic effluent at secured land fill which is part and parcel of their manufacturing activity. In these terms, we hold that appellant has correctly taken cenvat credit and consequently, they are not required to reverse the same…."

The impugned orders were set aside and the appeals were allowed with consequential relief.

(See 2015-TIOL-2075-CESTAT-DEL)


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