CUSTOMS, EXCISE AND SERVICE TAX APPELLATE TRIBUNAL CHENNAI REGIONAL BENCH – COURT No. III Excise Appeal No. 40623 of 2021 (Arising out of Order-in-Original No. MDU-CEX-COM-02/2021 dated 26.04.2021 passed by Commissioner of CGST & Central Excise, Central Revenue Buildings, Bibikulam, Madurai – 625

002)

Commissioner of GST and Central Excise ...Respondent Madurai Commissionerate, Central Revenue Buildings, Bibikulam, Madurai – 625 002.

Versus The Ramco Cements Limited ...Appellant Ramasamy Raja Nagar, Virudhunagar, Tamil Nadu – 626 204.

APPEARANCE:

For the Appellant : Ms. O.M. Reena, Authorized Representative For the Respondent : Mr. R. Parthasarathy, Consultant CORAM:

HON’BLE MR. P. DINESHA, MEMBER (JUDICIAL)

HON’BLE MR. VASA SESHAGIRI RAO, MEMBER (TECHNICAL)

FINAL ORDER No. 40023 / 2026 DATE OF HEARING : 27.11.2025 DATE OF DECISION : 08.01.2026 Per Mr. VASA SESHAGIRI RAO The present appeal has been filed by the Commissioner of Central GST & Central Excise, Madurai against Order-in-Original No. MDU-CEX-COM-02-2021 dated 26.04.2021 (‘Impugned Order’ for short) passed by the Commissioner of Central Excise, Madurai, whereby proceedings initiated against M/s. The Ramco Cements Limited (formerly M/s. Madras Cements Limited), Virudhunagar (hereinafter referred to as “the respondent/assessee”) were dropped.

2.1 The respondent is engaged in the manufacture of cement falling under Chapter Heading 25 of the Central Excise Tariff Act, 1985 and had availed CENVAT credit on inputs, capital goods and input services in terms of the CENVAT Credit Rules, 2004.

2.2 During the period from November 2005 to March 2011, the respondent availed CENVAT credit of service tax amounting to Rs.3,22,90,726/- paid on maintenance and repair services of windmills located outside the factory premises. Electricity generated from such windmills was wheeled through the Tamil Nadu Electricity Board grid and equivalent units were drawn for use in the manufacture of cement.

2.3 The admissibility of such credit was disputed by the Department earlier, culminating in multiple Orders-in- Original and Orders-in-Appeal. The issue ultimately have reached this Tribunal, which, vide its Final Order Nos. 40281–40326/2015 dated 25.02.2015, allowed the Assessee’s appeals and held that such maintenance and repair services qualify as input services.

2.4 Though the Department filed appeals before the Hon’ble Madras High Court (Madurai Bench), the same were withdrawn on monetary grounds on 04.10.2019.

2.5 Pursuant thereto, in January 2017, the respondent took re-credit of Rs.3,22,90,726/-, out of which Rs.46,46,048/- pertained directly to the Tribunal’s Final Order and Rs.2,76,44,678/- related to credits earlier reversed under protest.

2.6 Consequently, a Show Cause Notice dated 05.02.2019 was issued proposing recovery of Rs.2,76,44,678/- along with interest and penalty. The adjudicating authority dropped the proceedings, leading to the present departmental appeal.

3. The Ld. Authorized Representative Ms. O.M. Reena, appeared for the Appellant/Revenue and advanced detailed submissions in support of the Appeal and the Ld. Consultant Mr. R. Parthasarathy, appeared on behalf of the Respondent and defended the Impugned Order.

4. Mainly, the contention of the Ld. Authorized Representative Ms. O.M. Reena are that: -

4.1 The adjudicating authority erred in dropping the demand merely by relying on earlier decisions without recording independent findings.

4.2 It was argued that windmills are located far away from the factory premises and electricity generated therein has no direct nexus with the manufacture of cement, as the power is fed into the grid and only accounting adjustments are made.

4.3 Reliance was placed on the proposition that decisions accepted on monetary limits do not constitute binding precedents in terms of Section 35R of the Central Excise Act, 1944.

4.4 Finally, she contends and prays to set aside the impugned order to restore the demand with interest and penalty.

5.1 The Ld. Consultant for