TaxTMI 
TaxTMI 
2026 (2) TMI 6
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....ECON Ltd. for rebuilding of Coke Oven Battery Nos. 1 & 2 with pollution control facility, covering design, engineering, civil works, supply of plant, machinery and equipment, erection, commissioning, testing and performance guarantee, executed as a works contract with MECON discharging service tax under Rule 2A(i) of the Service Tax (Determination of Value) Rules, 2006. 4. For execution of the contract, MECON procured various capital goods and equipment from different manufacturers, who issued invoices showing MECON as buyer and the Appellant as consignee and accordingly shipped the goods directly to the Appellant's premises on payment of appropriate duty. 5. The goods were received in the Appellant's factory, recorded as capital work-in-progress, and thereafter made available to the contractor (viz. MECON) for erection and commissioning of the coke oven battery within the Appellant's premises. On the basis of invoices issued by the manufacturers, the Appellant availed Cenvat Credit of the excise duty paid on the eligible capital goods. 6. In this factual matrix, a Show Cause Notice dated02.09.2015 was issued to the Appellant invoking extended period of limitation under Se....
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....es, pipes and fittings thereof; and goods which fall under other sub-clauses of Clause A of the definition. Also, goods which are components, spares or accessories to the capital goods or pollution control equipment need not fall under Chapters 84, 85 or 90 of the First Schedule to the Central Excise Tariff Act, 1985. This is clear from the definition of capital goods under Rule 2(a) (A) of the Cenvat Credit Rules, 2004 (hereinafter referred to as 'CCR') which provides the specified goods to qualify as capital goods when "used in the factory of the manufacturer of final product". 13. The Appellant submits that Rule 3(1) of CCR entitles a manufacturer of final product to take Cenvat credit of excise duty "paid on(i) any input or capital goods received in the factory of manufacture of final product". In the instant case, the Appellant is inter alia engaged in manufacture of various iron and steel products. Further, the items on which credit has been availed by the Appellant pertained to the Purchase Order/ Work Order placed for supply of goods which were either plant and machinery or their auxiliaries falling under the definition of 'capital goods' in as much as the same were used....
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....is submitted that under the contract, the capital goods viz. plant and machinery is sold by MECON to the Appellant. Thus, the Appellant becomes the owner of the goods first which are supplied under the contract and these goods are then provided to MECON free of cost for erection of coke oven battery. Thus, the supply of capital goods viz. plant and machinery by MECON is a simplicitor sale transaction which is separate from the transaction of erection of plant and machinery. The sale of plant and machinery is a separate transaction, and the credit of such machinery cannot be availed by MECON as the machinery has not been used by MECON for providing any service. Therefore, the said plant and machinery does not qualify as 'inputs' for MECON and therefore the credit on such plant and machinery is in any case not admissible to MECON. 21. Further, it is submitted that apart from the goods supplied/ sold by MECON, there were certain other goods which were used by MECON for providing erection and commissioning services (viz. nuts, bolts etc). These goods in fact qualified as 'inputs' for MECON and credit on such goods being barred by the works contract valuation scheme was not a....
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.... - 2023 (5) TMI 650 - CESTAT New Delhi. * CCE & CGST, Udaipur v. M/s. Hindustan Zinc Ltd. - 2023 (7) TMI 427 - CESTAT New Delhi. 25. In view of the foregoing submissions, the impugned order denying credit to the Appellant is liable to be set aside. 26. Cenvat Credit cannot be denied on the ground that the Appellant's name appears as consignee. 27. It is humbly submitted that the finding of the department that merely because the Appellant was mentioned as consignee in the input invoices, the Appellant was not eligible to avail credit on such disputed goods, is wholly erroneous and legally untenable in view of the following submissions and settled judicial precedents. 28. It is submitted that the goods received by the Appellant were procured from other manufacturers by MECON and consigned directly to the Appellant's premises under cover of valid documents. In the present case, the invoices on which credit has been taken by the Appellant have been issued by the manufacturer of those goods. All the particulars that are required to be mentioned on the invoice are mentioned on such invoices. Further, these invoices contained the name and address of the Appellant as &....
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....nation for availment of credit on capital goods. Accordingly, the service provider is eligible to take the creditof the capital goods used in the works contract and pass on the same to the recipient. 35. It is submitted that MECON valued the service portion under Rule 2A and did not avail any CENVAT credit on inputs. The entire credit of Rs. 3,89,58,172/- availed by the Appellant pertains to capital goods used in rebuilding of the coke oven battery. 36. In view of the aforesaid submissions, the Appellant submits that the Appellant has correctly taken Cenvat Credit on the capital goods and the impugned order is liable to be set aside on this ground alone. 37. Extended period of limitation is not invokable thus the demand is entirely time barred. 38. In the present case, the SCN was issued on 02.09.2015 for the period August 2010 to June 2013 by invoking the extended period of limitation. It is submitted that allegation of fraud, suppression or willful misstatement against the assessee cannot be sustained since the Appellant has been filing their ER-1 returns regularly and disclosing amount of Cenvat credit availed and it, during the underlying period. He relied on Commis....
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....mbly submitted that extended period is wrongly invoked in this case, and the entire demand pertaining to the underlying period is liable to be set aside. Appellant cannot be attributed with the charge of suppression of fact with intent to evade payment of tax, being a Public Sector Undertaking. 45. Moreover, the Appellant is a public sector undertaking and it cannot be assumed that the Appellant has intentionally suppressed any fact with an intent to evade payment of duty. Thus, extended period of limitation is not invocable for this reason, as well. In support of this, reliance is placed on the following cases: * Steel Authority of India Ltd. v. CCE, Raipur, 2017 (2) TMI 978 - CESTAT New Delhi * Commissioner of C. Ex., Chennai-I v. Chennai Petroleum Corpn. Ltd., 2007 (211) E.L.T. 193 (S.C.) * Rajasthan Tourism Development Corpn. Ltd. v. C.C.E., Jaipur-I, 2017 (5) G.S.T.L. 169 (Tri. - Del.) affirmed in 2018 (15) G.S.T.L. 307 (Raj.) 46. Hence the entire demand is liable to be set aside as being time barred. 48. The Ld. Authorized Representative has justified the impugned order. 49. Heard both sides and considered the submissions. 50. We f....
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....rating 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 yam 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. The parts of the plant were received in the factory of the respondents and the name of the respondents was also mentioned in the invoice as consignee along with the name of their contractor. We find that the Tribunal in the case of Aditya Cement Limited and N.R.C. Ltd relied upon by the respondents held that where the capital goods were assembled in the factory through a contractor and the capital goods so manufactured are used in the manufacture of final products for which the capital goods is entitled to the credit on the parts of capital goods. In view o....