CENVAT Credit on machineries purchased from Civil Contractor as part of Contract

[Satheesh Shetty]

Dear Expert

If works Contract for building manafacturing Plant which include utility equipments, and taxes charged by the contractor is 4.94%,  & KVAT of Works Contract, Now can Manfacturere  take CENVAT Credit for Excise Duty on Equipment which will come from directly from the manafacturer of equipments. based on Consignee is marked as Clint Address and Bill to address is the contractor. Is there any risk to contractor as He is paying lower tax without taking CENVAT? 

AI Summary

CENVAT credit entitlement hinges on consignee details and documentation; VAT treatment can alter works contract classification.
CENVAT credit may be availed if the manufacturer is named as consignee and the manufacturer's road permit is used; the contractor's lower tax payment does not affect excise credit. Separately invoiced, identifiable equipment risks being treated as direct sales rather than part of a works contract, triggering different VAT consequences: inter state supplies involve an E 1 style commercial invoice from the contractor to the manufacturer, while intra state supplies require the contractor to invoice and charge KVAT.