TaxTMI 
TaxTMI 
2025 (12) TMI 944
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....ng of the exemption under Notification No. 12/2012-C.E. dated 01.03.2012. 2. For setting up the LPG plant, the Appellant entered into an "Engineering Procurement of Materials, Construction and Commissioning Contract" (EPCC Contract) on lump sum turnkey basis with M/s. Punj Lloyd, wherein M/s. Punj Lloyd was required to procure, erect, install and commission an LPG plant at the Appellant's factory premises ("the Contract"). To execute the contract, M/s. Punj Lloyd in turn placed orders for machineries, instruments, pipes and parts & components ("goods") from various third-party manufacturers. These goods were brought into the Appellant's factory directly. During the course of each supply, the third-party manufacturers would raise invoices for payment wherein M/s. Punj Lloyd was referred to as the 'buyer' and the Appellant was referred to as the 'consignee'. M/s. Punj Lloyd did not avail Cenvat Credit of the duties paid on any of the goods procured from the third-party manufacturers. M/s. Punj Lloyd paid service tax under Rule 2A of the Service Tax (Determination of Value) Rules, 2006 ('STR' for short) [applies only to Works Contract] on the services portion of the works contract.....
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....ed 15.01.2002. It was also held that the decision of Indian Oil Corporation Ltd. vs. CCC & ST, Rohtak [2014 (307) ELT 560 (Tri-Del)] would not be applicable; contention that the present demand of Rs.13,98,80,439/- included capital goods credit availed on goods supplied by contractors other than M/s. Punj Lloyd cannot be considered since they had failed to submit the details of the break-up; the Appellant is ineligible for CENVAT Credit since the Works Contract Services used in relation to setting-up of the factory or making structures for support of the capital goods is not an "input service" defined under the amended Credit Rules w.e.f. 01.04.2011. Aggrieved by the demands raised in the OIO, Assessee-Appellant has filed the present Appeal before this forum. 6. Heard Shri Raghavan Ramabadran, Ld. Advocate for the Appellant and Shri M. Selvakumar, Ld. Assistant Commissioner defended the impugned order. 7. It is the case of the Appellant that the goods supplied by third-party manufacturers qualify as 'capital goods' under Rule 2(a) of the Credit Rules since the goods were notified capital goods falling under Chapter 84, 85 and 90 of the First Schedule to the Central Excise Tari....
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....ar Vs International Tractor Ltd. - 2007 (220) ELT 155 (Tri.-Del) and CCE Raigad Vs JSW Ispat Steel Ltd. - 2015 (327) ELT 549 (Tri.-Bom) for the principle that ownership of the goods is not a criterion for denial of Credit on the capital goods. 10. Thus, the Appellant is eligible to avail CENVAT Credit on the 'capital goods' received in the premises of the Appellant under Rule 3 of the Credit Rules. Reliance is placed on CCE & CGST vs. M/S. Hindustan Zinc Ltd. - 2023 (7) TMI 427 - CESTAT NEW DELHI. 11. Insofar as the decisions relied upon in the impugned order, ld. Advocate would submit that both Gujarat State Petronet Ltd. Vs CC & C.Ex Ahmedabad - 2013 (32) STR 510 (Tri.-Ahmd.) and Galaxy Mercantiles Ltd. Vs CCE Noida - 2014 (33) STR 39 (Tri.-Del.) would not be applicable to the facts and circumstances of the present case; Gujarat State Petronet (supra) dealt with a situation where the works contractor engaged by the Assessee had availed the benefit of exemption under the Notification No.12/2003-ST dated 20.06.2003 and hence, the Tribunal held that Explanation to sub-rule 7 of Rule 3 of the CEVAT Credit Rules would get triggered and held that Credit was not available to the r....
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....or payment of service tax, then in terms of Explanation 2, the provider of taxable service shall not take CENVAT credit of duties or cess paid on inputs used in the said work contract. 13.2 The plain reading of 2A (i) of the STR determined how the value of the service portion in the execution of works contract needs to be followed, where in the value of property in goods transferred in the work contract has been exempted from the value of service portion of works contract for payment of service tax. When the value of property in goods is not included in the value for payment of service tax how can the CENVAT Credit on the same can be allowed. 13.3 The CESTAT, New Delhi in the case of M/s.Galaxy Mercantile Ltd. Vs CCE Noida - 2014 (33) STR 39 (Tri.-Del.) had, in fact, rightly questioned the locus standi of the Appellant therein arguing for the CENVAT credit and agreed with the Revenue stand. 13.4 There is no requirement for availing any Exemption Notification. The valuation under Rule 2A (i) of STR for Works Contract provides for exempting the value of materials and the Explanation 2 of the STR does not allow availment of CENVAT credit and there is also no Notification spec....
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....3 (SC). He would thus pray for upholding the demands confirmed in the impugned order and dismiss the Appeal. 14. In his rejoinder, ld. Advocate Shri Raghavan Rambhadran would contend that the orders relied upon by the Adjudicating Authority which have only been relied on by the Ld. A.R are on different facts and hence, they are not applicable. 15. We have carefully considered the rival contentions and have also analysed the documents placed on record before us; we have also carefully considered the judicial precedents relied upon during the course of arguments before us. Upon hearing both sides, we find that the following issues arise for our consideration: (i) Whether the denial of CENVAT Credit availed on duty paid goods is correct when the goods were claimed to be 'capital goods'? (ii) Whether the rejection of CENVAT Credit availed of service Tax paid on input services is in order? (iii) Whether the Revenue has established 'suppression' while invoking the extended period of limitation? (iv) Whether charging of interest was justified when the credit stood reversed prior to utilisation? (v) Whether levy of penalty under Section....
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....ods. What is important is to see whether the importers made any wilful misstatement or suppression of facts and induced the delivery of goods. 28. ... .... The camera could have been operated to see the length of time of the single sequence and whether recording of the single sequence exhausts the total memory of the camera (including extended memory) and whether the cameras were eligible for exemption. It is difficult in such circumstances to infer that there was any wilful misstatement of facts. In these circumstances, it must, therefore, follow that the extended period of limitation of five years was not available to any authority to re-open under Section 28(4)." (emphasis added) 19. Further, when the Revenue sought review of the above decision, the Hon'ble Apex Court in its judgement dt. 07.11.2024 in the Review Petition No.400 of 2021 in Civil Appeal No.1827 of 2018 [2024 (390) ELT 545 (SC)] has held at para 168 (page 156) as under : "(iii) This Court in Canon India (supra) based its judgment on two grounds: (1) the show cause notices issued by the DRI officers were invalid for want of jurisdiction; and (2) the show cause notices....