2023 (12) TMI 47

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.... involved in these two appeals is identical and accordingly, the same are taken up for hearing together and a common order is being passed. 2. The appellants in these cases have entered into agreements with various Municipalities/Municipal Corporations for implementation of energy conservation measures, installation of feeder panels for automation along with metering operation, maintenance and repair service of the Street Lighting fixtures etc. The contracts entered into between the parties have stipulated that the contractor should be entitled for the consideration on the basis of energy saving earned by them i.e., "Pay from Savings" (ESCO) basis. The appellants herein have classified the said provision of service under the taxable cate....

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....inputs. The show cause notices issued in this regard were adjudicated upon by the department in confirming the proposals made in the show cause notices. The learned adjudicating authority has held that since the assessee-appellants were in possession of the equipment and systems installed by them; and on expiry of the contract period, the right of ownership of the said goods were vested with the Municipalities/ Municipal Corporation, then in such case, the finished goods manufactured by the Appellants cannot be considered as raw material/inputs for provision of taxable service by them. On the basis of such observations, the learned adjudicating authority has held that the LED lightings, fixtures and control panels manufactured and cleared b....

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....xcise duty liability. It is also an admitted position that those goods manufactured by the appellants were in fact used for provision of the output service namely Scientific and Technical Consultancy Service and Maintenance and Repair Service to the contractee, viz., the various Municipalities/Municipality Corporations located within the state of Gujarat and Orissa. 7. The issue involved in these appeals for consideration by the Tribunal is whether, the disputed goods should be considered as inputs for the purpose of availment of Cenvat Credit in respect of the Central Excise duty paid by the appellants. The definition of input is contained in Rule 2(k) of the CENVAT Credit Rules, 2004. The relevant definition is extracted herein below f....