Cenvat credit on effluent treatment services is admissible as integral to the manufacturing process, supporting revenue's compliance with pollution control norms.

RAMESH NAIR

The issue involved in the present case is that whether the appellant is entitled for Cenvat credit on the services related to effluent treatment of the waste generated at the appellant’ s factory and such effluent treatment service availed from the third party agency i.e. Narmada Clean Tech Ltd, Saurashtra Enviro Projects Pvt Ltd and Bharuch Enviro Infrastructure Ltd.

2. Shri Prakash Shah, Learned Counsel along with Shri Mihir Mehta, Learned Advocate and Shri Mohit Raval, Learned Advocate appearing on behalf of the appellant submits that the issue is no longer res-integra as the Hon’ble Supreme Court as well as this Tribunal in various judgments held that the services related to effluent treatment are admissible input service and credit is admissible. He placed reliance on the following judgments: -

 Cheminova India Ltd vs. CCE & ST, Surat -II - E/11732/2014- Final Order dated 28.06.2023

 Adroit Pharmachem Pvt Ltd vs. Commissioner of C.Ex. & ST., Vadodara – 2022 (1) TMI 59 CESTAT Ahmedabad

 Commissioner of C.Ex.& ST., Surat-II vs. M/s. Kanoria Chemicals & Industries Ltd – 2015 (7) TMI 970 CESTAT Ahmedabad

 Wipro Enterprises (P) Ltd vs. Commissioner of GST & Central Excise – 2018 (12) TMI 1167 CESTAT Chennai.

 Anar Chemicals Pvt. Ltd vs. CCE – 2011 (24) STR 32 (Tri.Ahmd)

 Indian Farmers Fertilizer Cooperative Ltd vs. Collector , - 1996 (86) ELT 177 (SC)

 Union of India vs. Hindustan Zinc Ltd – 2019 (367) ELT 616 (Raj)

 Collector of C. Ex. Vs. Eastend Paper Industries Ltd – 1989 (43) ELT 201 (SC)

 Deepak Fertilizers & Petrochemicals Corpn. Ltd vs. C.C.Ex., Belapur – 2013(32) STR 532 (Bom.)

 C.C.E & Cus., Aurangabad vs. Endurance Technology Pvt Ltd – 2017 (52) STR 361 (Bom.)

 Huhtamaki PPL Ltd vs. Commissioner of C.Ex. & ST., Surat -I – 2021 (50) GSTL 309 (Tri. Ahmd)

 Commr. Of C. Ex., Vadodara – II vs. Siemens Healthcare Diagnostics Ltd – 2014 (36) STR 192 (Tri. Ahmd)

3. Shri Rajesh K Agarwal, Learned Superintendent (AR) appearing on behalf of the Revenue reiterates the finding of the impugned order.

4. We have carefully considered the submission made by both sides and perused the records. We find that the dispute related to admissibility of Cenvat credit on the effluent treatment service in respect of industrial waste generated in the factory of the appellant. The contention of the Revenue is that the effluent treatment of waste is not related to manufacture of final product, therefore, it does not have nexus with the manufacturing activity of the appellant. We do not agree with this contention of the Revenue for the reason that as per the pollution control act, it is mandatory for every industrial unit to treat the effluent waste generated during the manufacture of final product, therefore, the industrial unit cannot carry out the production without compliance of pollution control norms which includes effluent treatment of waste generated during the manufacturing activity. Therefore, the effluent treatment of waste is necessary for overall manufacturing activity of the industrial unit. This issue has been considered in the various judgments as follows: -

a) Indian Farmers Fertilizer Cooperative Ltd vs. Collector , - 1996 (86) ELT 177 (SC) :

“9. That leaves us to consider whether the raw naphtha used to produce the ammonia which is used in the effluent treatment plant is eligible for the said exemption. It is too late in the day to take the view that the treatment of effluents from a plant is not an essential and integral part of the process of manufacture in the plant. The emphasis that has rightly been laid in recent years upon the environment and pollution control requires that all plants which emit effluents should be so equipped as to rid