2025 (4) TMI 1097

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....roduction of sized iron ore concentrate fines falling under Chapter 26 of the First Schedule to the Central Excise Tariff Act, 1985. (ii) In order to increase the capacity of the manufacturing plant, the appellant entered into an agreement with M/s. Paul Wurth Italia, for commissioning and installing the "I" Blast Furnace (hereinafter referred "IBF") at the appellant's premises. (iii) Further, upon recommendation of M/s. Paul Wurth Italia, the appellant entered into following four independent agreements with M/s. Larsen and Toubro (hereinafter referred to as "L & T") for carrying out following activities. (a) Contract 1 (TSL/E&P-08-11/IBF/IDR-L&T dated 27.10.2008) - Supply of indigenous designs and drawings for the material handling system/ (b) Contract 2 (TSL/E&P-08-010/IBF/IDR-L&T dated 27.10.2008) - Design, Manufacture and supply of indigenous plant, machinery and equipment with auxiliaries. (c) Contract 3 (TSL/E&P-08-013/IBF/IDR-L&T dated 27.10.2008) - Receiving of materials, unloading, storing and handling at site, preservation, erection, testing, commissioning etc. (d) Contract 4 (TSL/E&P-08-012/IBF/IDR-L&T dated 27.10.200....

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.... was initiated by the department vide SCN dated 04.09.2013 on identical allegations, viz. the capital goods on which the appellant availed credit were inputs for L&T, who was restricted from availing credit and thus, appellant could also not have been taken the said credit. (xiii) The Ld.Commissioner, Central Excise and Service Tax, Jamshedpur confirmed the demand (along with interest and equal penalty) proposed in the underlying SCN along with imposition of personal penalty on Shri Anshuman Priyadarshini (Chief of Project Procurement), based on the following findings :- The four separate contracts are entered into only for the purpose of mutual convenience and the same were for Engineering, Procurement and Construction (EPC) project which was awarded on turnkey basis. When service provider, i.e., L&T opted for concessional rate of payment under Works Contract Service, such credit cannot be passed on to the service recipient. Cenvat Credit Rules do not allow the service recipient to avail credit on goods which has been used by the service provider. Claim that materials were sold to appellant is not tenable since the project was a turnkey....

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....ng at site, preservation, erection, testing, commissioning, etc., and civil & structural steel work. 2.1. In view of these contracts / agreements, the appellants placed purchase orders to the appellant namely, M/s. Larsen and Toubro Limited (hereinafter referred to as "L&T"), who supplied equipment / plant and machinery to Tata, which duly qualified as "capital goods" for Tata, the property wherein was transferred to the appellant/Tata at its warehouse. Such goods were either manufactured and supplied directly by L&T to Tata or were procured from other manufacturers and consigned directly to Tata's premises. Accordingly, Tata took CENVAT Credit on the said goods as capital goods. 2.2. Further, the said goods were provided by Tata to L&T on requisition during erection and commissioning stage for carrying out installation thereof by L&T under the contracts. L&T paid tax under the Composition Scheme, clubbing the consideration received in all the contracts and did not take any credit of goods supplied under any of the contracts. Tata availed full credit of: Service Tax discharged by L&T; and Capital goods received under the contract on sale basi....

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....he assessee which is ultimately used in the manufacture of the end product cement. Therefore, Sl. No. 5 of the Table appended to rule 57 Q shall be attracted and the assessee shall be entitle to the modvat credit on such DGPP sets being part/components of the cement plant/final manufacture product. 7. The above analysis is clearly applicable to the facts herein as the parts of DG sets were imported and were received by the assessee in their factory even where the purchases are made by WIL. Further, the assessee acquired the components of the generating set, not for use in the manufacture of generating set as a final product but to generate electricity which was required for the manufacture of yarn etc. which was their final product. Needless to mention that the parts, spares and accessories are covered under the definition of capital goods under Rule 57-Q." 8.3. In the case of Commissioner of C.Ex., Jalandhar v. International Tractor Ltd. [2007 (220) E.L.T. 155 (Tri. - Del.)], the Tribunal has taken the view, as under: - "4. The undisputed facts are that the respondents got manufactured a chassis painting plant through M/s. Haden Engineering India Limited....