HINDUSTAN ZINC LTD. Vs. COMMISSIONER OF CENTRAL EXCISE

JUDGEMENT

(1.) ALL the stay petitions are being disposed of by a common order as the issue involved is identical.

(2.) The lower authorities have denied the benefit of Cenvat credit of service tax paid on services availed by the applicants/appellants for dismantling/handling of unusable material and its transportation. After hearing both sides, I find that the contention of the learned Advocate is that services used in relation to renovation and repair of factory and activities relating to business are input services as per Rule 2(1) of the Cenvat Credit Rules, 2004. It is submitted that the manufacturing activity undertaken by the appellant comprises of making of concentrate by purification of ores raised by the appellant from its underground captive mines. The entire purification process involves handling of abrasive, corrosive materials and acids which lead to corrosion of metallic and other surfaces and pipes etc. which are to be removed periodically from the main machines and are to be replaced with new ones. A scrap is arisen out of such corroded and worn out material mostly comprised of items like scrap of MS, SS, GI/MS Pipes, Rubber etc. The appellant has given contract for dismantling, sorting & transportation of such scraps from underground area & surface area of all mines & mill area to Central Store, Zawar Mines. The scrap is first dismantled from the main machine, then the various sorts of scrap are sorted into separate categories and then the same is transported by the contractor to the Central Stores of the Zawar Mines, wherefrom the said scrap is sold to the buyers. It is submitted that such services incurred in connection with repairs and renovation of the factory of the appellant which per se befalls under the category of services mentioned under the inclusive part of the definition of input services as defined under Rule 2(1) of the Cenvat Credit Rules, 2004. Thus, in view of the direct eligibility of credit in respect of said services, the credit taken by the appellant may please be held as allowable. The appellants have submitted that the said services are eligible for Cenvat credit and the activities are relating to the business and have wider scope. They have placed reliance on the following judgments: -