2023 (12) TMI 1063
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....credit amounting to Rs. 183,36,81,368/- proposed in the Notice was disallowed along with demand of interest and imposition of Penalty of Rs. 183,36,81,368/- under Rule 15 of the CENVAT Credit Rules, 2004 (CCR) read with Section 11AC of the Central Excise Act, 1944 (CER). 2. M/s. Indian Oil Corporation Limited (hereinafter referred to "Appellant") is a PSU engaged in the manufacture of various petroleum products falling under Chapter 27 of the 1st Schedule to the erstwhile Central Excise Tariff Act, 1985. The Appellant during the relevant period entered into two Build, Own, Operate and Transfer (BOOT) agreements with the following contractors for the below mentioned purposes: M/s IL&FS Paradip Refinery Water Limited Construction, operati....
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....enied to them on the sole ground that no service has been rendered by the contractors to the Appellant and the amount paid by the Appellant is in the nature of reimbursement of capital investment and not towards the provision of any service. It is a settled proposition of law that Cenvat credit cannot be denied to service recipient when payment of service tax is not disputed by the department at the service provider's end. 5. In this regard, the Appellant placed their reliance on the following rulings: M/s Hindalco Industries Limited vs. Commissioner of Customs, Central Excise & Service Tax, Rourkela, 2023 (12) TMI 117 - CESTAT KOLKATA, Conneqt Business Solutions Ltd vs. Commissioner of Central Tax Central Excise & Service Tax Secunde....
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.... 513 (SC), CCE vs. Gas Authority of India Ltd, 2008 (232) ELT 7 (SC), CCE, Nagpur vs. Ballarpur Industries Ltd, 2007(215)ELT489(SC). 7. The SCN nowhere indicated as to why such reimbursement made to the contractors did not qualify to be a service and as to what was the nature of activity being undertaken by IL&FS and IOTL, pertaining to such reimbursement. It is a settled principle in law that a show cause notice must be specific with respect to the allegations and not vague. In this regard, the Appellant placed their reliance on the following rulings: CCE vs. Brindavan Beverages (P) Ltd, 2007 (213) ELT 487 (SC), R.R. Financial Consultants Ltd. vs. UOI, 2014 (33) STR 12 (Del.), M/s. ITS My Name PvtLtd. vs. Directorate Genera....
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..... Since the contract period is huge and required huge capital investment from the contractors in both the contracts, the consideration was arrived at, both on variable as well as fixed basis, linked to the operational parameters as well as capital outlay in the contract, respectively. It is a settled law that that the contractual arrangement between the parties is to be read in entirety. The individual terms of the agreement cannot be read in piecemeal, disjunctively from other clauses of the contract. The intention of the parties has to be gathered from a wholesome reading of the contract. In this regard reliance is placed on the following rulings: Ishikawajma-Harima Heavy Industries Ltd. vs. Director of Income Tax, Mumbai, (2007) 288 IT....
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...., the Appellant being a PSU, there exists a presumption of bona fide and no allegation of suppression of facts with intent to evade payment of tax can be levelled against the Appellant in the absence of any concrete evidence. In this regard reliance is placed on the following rulings: Commissioner vs. Markfed Refined Oil & Allied Indus, 2009 (7) TMI 1204 - PUNJAB HIGH COURT, UP State Sugar & Cane Dev. Corpn. Ltd vs. Commr. of C. Ex., Allahabad, 2009 (242) ELT 260 (Tri-Del). 12. In view of the above submissions, the Appellant prayed for setting aside the demands confirmed in the impugned order an merits as well as on the ground of limitation. 13. The Ld. D.R reiterated the findings of the adjudicating authority in the impugned order.....
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....d on by ABMCPL to the Appellant. We observe that the decisions cited by the Appellant mentioned in Para 5 supra supports this view. By following the decisions cited above, we hold that the demands confirmed in the impugned orders along with interest and penalty on this count are not sustainable and accordingly, we set aside the same. 16. By relying on the decision cited above, we hold that the denial of Cenvat credit amounting to Rs. 183,36,81,368/-in this case vide the impugned order is not sustainable. Since the demand of recovery of Cenvat credit is not sustainable, the question of demanding interest and imposing penalty does not arise. 17. We also observe that the demand has been confirmed in the instant case by invoking the extended ....