AI Drafter 
TaxTMI 
TaxTMI 
2017 (4) TMI 152
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....y equivalent of the credit amount has been imposed on the Appellant assessee. 2 (i) The brief facts are that M/s Bharat Oman Refineries Ltd. set up a petroleum refinery at Village Agasod, Tehsil Bina, District Sagar (MP). Various sections of the refinery were constructed by different contractors. One of the contractors, namely M/s Petron Engineering Constructions Ltd. undertook: i) Construction of Fired Heaters for HCU/DHDT ii) Mechanical work of HCU/DHDT; and iii) Electrical work for offsites (ii) The services provided by the contractor namely M/s Petron Engineering Constructions Ltd. (M/s Petron/PECL) were chargeable to Service Tax under the category of Works Contract Service as defined under Sub-clause (z....
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....the records of the Appellant conducted during the month of October 2010, it was noticed that the Appellant had availed of CENVAT credit of duty paid on the input goods used by the Contractor i.e. the service provider, in providing Works Contract Service to Appellant assessee. (vii) The Revenue states that the Appellant adopted a new method (modus operandi) where the Appellant was indicated as the consignee in the invoices issued by the consignors, whereas the buyer of the goods was shown as M/s Petron Engineering Construction Ltd; during the course of investigation conducted after audit, it came to the notice that the goods had been purchased by M/s Petron Engineering Construction Ltd. and not by the Appellant. (viii) A show cause not....
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.... submits that once the payment of option of service tax @ 4% of the gross amount charged (that included value of the transfer of property in goods i.e. sale value of the goods and the value of service provided), instead of payment of service tax @ 10% under Section 66 of the Finance Act is exercised, CENVAT credit of the Central Excise Duty paid on the input goods, which are part of the works contract cannot be claimed by the Appellant assessee. 5. (ii) The learned AR in support relies on the following case law: Gauri Plasticulture (P) Ltd. V/s Commissioner of Central Excise, Indore, 2006 (202) E.L.T. 199(Tri. - LB) 6. After careful consideration of the facts on record and the submissions of both the sides, it appears that th....
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....cept for the charges for obtaining them on hire: Provided that nothing contained in this Explanation shall apply to a works contract, where the execution under the said contract has commenced or where any payment, except by way of credit or debit to any account, has been made in relation to the said contract on or before the 7th day of July, 2009.]; (2) The provider of taxable service shall not take CENVAT credit of duties or cess paid on any inputs, used in or in relation to the said works contract, under the provisions of CENVAT Credit Rules, 2004. (3) The provider of taxable service who opts to pay service tax under these rules shall exercise such option in respect of a works contract prior to payment of servic....
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....urther, the Appellant M/s Bharat Oman Refineries Ltd. does not have any concern, connection or nexus with the ownership of the goods initially supplied to the contractor namely M/s Petrone Engineering Construction Ltd. The said goods were supplied to the contractor and the contractor namely M/s Petrone Engineering Construction Ltd. availed the benefit of the reduced rate of service tax (by opting payment of service tax under the Composite Scheme) including for the value of the goods sold to the contractor. The Appellant, therefore, here would not have any right to avail the CENVAT credit for the goods which are actually the inputs for the supplier contractor who opted for Composite Scheme for payment of Service Tax. 6.3 When the CENVAT c....