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2022 (8) TMI 228 - Central Excise
CENVAT Credit availed by the appellant company on capital goods - credit has been availed on the strength of excise invoices issued by the manufacturer (OEM) of equipment - invocation of extended period of limitation - HELD THAT:- The Ld. Commissioner in para no. 79 to 81 has arrived at the conclusion that though the entire work for construction of power plant (CPP) is a turnkey contract on EPC basis, the work orders have been segregated to split into supply of goods and works & services for their mutual convenience to enable the contractor to claim deduction of value of goods for arriving at value of taxable services for charging service tax. It is found that by making the above observation, the Ld. Commissioner has not conclusively drawn any inference to state whether there is any embargo to avail Cenvat Credit on capital goods, more so ever when there is no dispute with regard to availment of credit on input service in the hands of the appellant.
The Ld. Commissioner made a fundamental error while observing that payments have not been made to the original supplier (OEMs) but to the Contractor against the separate set of commercial invoices - In any case, whether or not the payment has been made against the excise invoices issued by the OEM or the commercial invoice issued by the Contractor who has procured the goods on behalf of the Appellant for use in the power plant is completely irrelevant. The Ld. Commissioner has thus made a fundamental error while taking into consideration the above payment related aspect while deciding the eligibility to avail credit on capital goods.
Extended period of limitation - HELD THAT:- There are no positive evidence to show that there was any fraud or willful suppression inasmuch as the availment of credit has been duly shown in the monthly returns and credit entries have been duly recorded in the Credit Register which form part of the Annexure to SCN. Thus, there are no ingredient to justify invocation of extended period of limitation and therefore, the impugned proceedings are also barred by limitation.
The order cannot be sustained and is therefore set aside - Penalty also set aside - appeal allowed - decided in favor of appellant.