TaxTMI 
TaxTMI 
2026 (6) TMI 765
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....ong with interest has been disallowed under Rule 14 of the CENVAT Credit Rules, 2004 read with Section 73 of the Finance Act, 1994 and equal penalty has been imposed under Rule 15(4) of the CENVAT Credit Rules read with Section 78 of the Finance Act. 2. The fact, in brief, Rashtriya Ispat Nigam Ltd., (hereinafter referred to as "RINL") floated an international tender for design, engineering, manufacture, supply, erection, commissioning and performance guarantee of Blast Furnace no.3 at Visakhapatnam Steel Plant. For execution of the project, a consortium comprising i) Larsen & Toubro Ltd., (Appellant) ii) Paul Wurth Italia S.P.A (PWI), and iii) Paul Wurth India Pvt Ltd., (PWIPL), was constituted. Under the consortium arrangement, Paul Wu....
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....WI were Consulting Engineer Services specifically covered under Rule 6(5) of CENVAT Credit Rules, 2004 and therefore, full credit is admissible. Even, otherwise the leadership fee was paid in relation to the entire consortium project and not merely to manufacture of goods. Learned Counsel for the appellant further submitted that the issue is revenue neutral and there is no suppression and intention to evade the tax. Therefore, period of limitation cannot be invoked. 6. Learned Authorized Representatives reiterates the findings of the Adjudicating Authority, inter alia, submitted that the contract M-720 substantially related to manufacture and supply of plant and machinery. The service received was attributable to non-taxable/exempt activ....
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....ise Vs. Dashion Ltd. reported in 2016 (41) S.T.R. 884 (Guj.) wherein it is held that when the invoices for input services are not disputed by the Revenue, the availment of Cenvat credit by the unit of an ISD Distributor cannot be denied on the ground that the service was availed by some other unit, it being merely a procedural deficiency. It is emphasized by the court that substantial benefit of the Cenvat credit provision should not be denied on the mere ground of procedural lapse. In the present case also there is no E/30841/2018, E/30151/2019, E/30578/2021 [DB] 17 dispute about the invoices raised by the ISD, also there is no dispute that major amount of the credit has been distributed on pro rata distribution basis only, except that in ....
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.... would have enabled them to utilise full credit. It would show that the exercise is totally Revenue neutral and no loss has been caused to the Revenue (infact Revenue has gained). In the absence of any legal requirement to avail credit based on the services received during the relevant time and in the light of the decision cited by the learned counsel, the procedural irregularity has to be ignored and the demand confirmed has to be setaside on this ground. In the result, demand for Cenvat credit of Rs. E/30841/2018, E/30151/2019, E/30578/2021 [DB] 18 1,07,07,142/- with interest and penalty equal to the same imposed under Section 11AC of Central Excise Act, 1944 are setaside." The procedural irregularities are held to be ignored whe....
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....manufacture of goods under Contract M-720. 13. The Hon'ble Supreme Court of India in the case of BSNL Vs Union of India [2006 (2) S.T.R. 161 (S.C.)] reaffirmed the principle that the true nature of a transaction must be determined from the substance of the contract and not by artificially splitting an integrated arrangements. The test for deciding whether a contract falls into one category or the other is to as what is the substance of the contract. We will, for the want of a better phrase, call this dominant nature test. Similarly, the principles laid down in State of Madras Vs Gannon Dunkerley and Co. (Madras) Ltd., [1958 (4) TMI 42 - SC] continue to govern characterization of composite contracts. Applying the aforesaid principles, we ....
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....i] iii) Kaleesuwari Refinery Pvt Ltd., Vs Commissioner of Central Excise, Chennai [2007 SCC online CESTAT 2837] Support the proposition that where Rule 6(5) of CENVAT Credit Rules, 2004 applies, full credit is available. We therefore, hold that the appellant is entitled to the benefit of Rule 6(5) of CENVAT Credit Rules, 2004. 16. An another significance aspect is, that the Department has accepted payment of Service Tax on the leadership fee. If tax paid under Reverse Charge is accepted as correctly paid, denial of corresponding credit without disputing receipt of service leads to a revenue neutral situation. The Hon'ble Supreme Court has repeatedly held that where the entire exercise is revenue neutral, allegations of intent....