Turnkey contract classification governs cenvat credit on installation-site services, requiring verification of contract value and invoices.

Cenvat credit on services used at an installation site depends on whether the underlying arrangement is a true turnkey contract in which erection, installation, freight and transit insurance form part of the contracted value and the site can be treated as the point of sale. Where the record does not conclusively show that all relevant cost elements were included in the contract price, the contractual terms and supporting invoices must be verified against the applicable CBEC circular before credit can be determined. The matter is therefore remitted for fresh examination of the contracts and invoices, with an opportunity of hearing to the assessee.

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Issues: Whether cenvat credit was admissible on services availed at the installation site in relation to turnkey supply and installation contracts.

Analysis: Admissibility of credit depended on whether the contracts were truly turnkey arrangements in which installation, erection, freight and transit insurance formed part of the contracted value so that the installation site could be treated as the point of sale. The existing record showed that credit had been allowed for some entries, but the remaining contracts and invoices did not conclusively establish that all relevant cost elements were included in the contract price. The correct course was therefore to verify the contractual terms and supporting invoices against the CBEC circular governing such cases.

Conclusion: The issue was not finally decided on merits and required factual verification by the original adjudicating authority.

Final Conclusion: The appellate order was set aside and the matter was returned for fresh decision after examining the contracts and invoices and granting hearing to the appellant.

Ratio Decidendi: Where admissibility of cenvat credit turns on whether a contract is a true turnkey contract and the factual record is incomplete, the matter must be remanded for verification of the contractual value and supporting documents before credit can be determined.

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