2018 (7) TMI 604

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....l Excise Act, 1944 has been imposed. The relevant facts for disposal of present appeal are that: 1. The appellant is a manufacturer of cotton and spurn yarn, falling under Chapter 52 and 55 of First Schedule of Central Excise Tariff Act, 1985. They are operating under Cenvat Credit Scheme and are availing the Cenvat Credit on excise duty paid on capital goods / inputs under the Cenvat Credit Rules, 2004. During the period under dispute, i.e., with effect from August 2007 to May 2009, the Appellants, for installing a power plant in their factory, entered into a contract with M/s Enmass GB Power Systems for supply of one super heated steam, coal, fire boiler and one 20MW STG power with auxiliaries. The Appellant took Cenvat Credit of th....

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....e arguments, it is submitted that apparently and admittedly, the Appellant had entered into a work service contract, and as such, is not entitled for the Cenvat Credit, as has been availed by them. While justifying the order under challenge, it is submitted that the demand of Cenvat Credit, along with the interest and the imposition of equal amount of penalty upon the Appellant is a justified demand. As such the appeal is prayed to be dismissed. 4. After hearing both the parties and perusing the documents on record, we are of the considered view that: As apparent from the contracts on record, the Appellant entered into two separate contracts, i.e., one for supply of materials / capital goods / parts / components of coal fired boiler /....

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....on all inputs / capital goods remains with the contractor only. Whether such goods were sent to the Appellant's premises after being procured by the contractor or directly will not make a difference as all are the inputs to be used in commission of boiler in Appellant's premises. Otherwise also, the invoice for the goods which the contractor ordered as trader has been raised in his name only. Accordingly, it is held that the Appellant has tried to create a confusion while creating a distinction between the definition of Input and Capital Goods. In the present circumstances, the Input and Capital Goods are one and the same thing as far as availing Cenvat Credit is concerned. Further, it is also an admission that the contractor has paid Servi....

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....ready held above that capital goods and the inputs are the inseparable parts of the Work Service Contract, especially when the invoice for the capital goods has been raised by the contractor himself, in such circumstances, mere mention of the Appellant being the consignee of the invoice which has been raised at the instance of his contractor, will not entitle the Appellant to claim the Cenvat Credit. Once this credit is not available to contractor because of him exercising the option under Composition Scheme, the said Cenvat Credit of cannot be passed on to the Appellant. A similar matter has already been adjudicated by this tribunal in the Appeal No. E/55349/2013, titled as Bharat Oman Refinary Limited vs. CCE Bhopal, as was decided by thi....