HINDALCO INDUSTRIES LTD. Vs. COMMISSIONER OF C. EX.

JUDGEMENT

(1.) THIS is an application for waiver of the pre -deposit of service tax credit of Rs. 71,97,202/ - and penalty of Rs. 10,000/ - for maintenance of this appeal.

(2.) The Commissioner by the impugned order had disallowed the service tax credit of Rs. 71,97,202/ - taken by the Appellant if the service tax on the insurance premium on the power generation plant of the Appellant, which supplies power to the Appellant's unit manufacturing various aluminium products. The service tax credit has been disallowed on the ground that the power plant is an entity separate from the unit producing aluminium product and therefore insurance premium paid for the power generation plant cannot be treated as an input service used in or in relation to manufacture of aluminium products. Another ground for denying the credit, is that the power plant producing electricity, a non -excisable product, cannot be treated as a manufacturer and hence cannot take service tax credit and since it is not registered as an input service distributor, the service tax credit taken by it cannot be distributed and availed by the aluminium unit.

(3.) THE learned Counsel on behalf of the Appellant pleaded that the power plant is integral part of the unit manufacturing aluminium. He also brought to our notice an order passed by the jurisdictional Commissioner in January 2007 by which in respect of this very plant, the credit of service tax in respect of two services - GTA and business auxiliary service availed in respect of power generation plant has been allowed. The learned Departmental Representative defending the Commissioners' order reiterated the grounds mentioned in the Commissioner's order and opposed full waiver of pre -deposit of Cenvat credit and penalty.