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M/s. Ultra Tech Cement Ltd. Versus CCE & S.T. -Indore

2016 (2) TMI 287 - CESTAT NEW DELHI

Ineligible CENVAT Credit availed on capital goods - various machinery and items purchased and used in setting up of thermal power plant in their factory.- Held that:- The appellants purchased capital goods, paid for the same and received under due documents in their premises. The supplier had another set of contracts for designing, erection, commissioning and civil/structural works. On all these service contracts, the contractor has paid service tax as applicable on full value. The question of e .....

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itions not even contemplated in the demand. On Careful analysis of the facts relevant to the case, we find that the impugned order is not legally sustainable and accordingly set aside the same - Decided in favour of assessee. - Misc. Application No. E/Misc/53518/2014 In Appeal No. E/55509/2013-EX [DB] - Final Order No. 53666/2015 - Dated:- 12-11-2015 - Smt. Sulekha Beevi C.S., Member (Judicial) And Shri B. Ravichandran, Member (Technical) For the Petitioner : Shri B.L. Narsimhan, Advocate For th .....

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to recover an amount of ₹ 34,72,87,308/- towards ineligible CENVAT Credit availed by the appellants on capital goods. The notice mentioned two main grounds for the demand: (a) The capital goods were used in the thermal power plant which is meant for generation of electricity. Since, electricity is exempted, such credit of capital goods are not available (b) The capital goods were in possession of contractor who did the erection, commissioning and installation of such thermal power plant. A .....

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grieved by this order, the appellant is before us. 2. The Ld. Counsel for the appellant, Shri B.L. Narsimhan, submitted that one of the main allegations in the show cause notice regarding the capital goods being ineligible for credit on the ground of their use in generation of electricity (exempted for duty) was considered and dropped by the original authority in his order. However, the original authority denied credit on entirely new set of propositions which were not at all alleged in the show .....

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redit cannot be denied. The ground taken up by the original authority to consider different contracts between the appellant and the Chinese company involved (supplier of capital goods) in supply and machinery and erection, commissioning thereafter is not legally deniable. It is also not contemplated in the demand issued by the department. 3. He further submitted that totally irrelevant issues have been taken up for discussion in the impugned order. The nature of service contract executed by the .....

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and stated that the ultimate object of various contracts entered into by the appellant with the supplier of goods is to commission thermal power plant in their factory. Hence, he argued that the contracts are read together to arrive at the conclusion that the capital goods were in possession of the contractor and hence, the appellants were not eligible for credit on the same. 5. We have heard both the sides and examined the appeal in records. 6. The point for decision is the eligibility of the .....

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s not available to the appellants. 8. We find that the show cause notice in the present case was issued in perfunctory manner with no analysis of legal provision applicable to the facts of the case. In fact, the show cause notice in para 12 and 13 talks about the eligibility of the contractor for CENVAT Credit on these impugned goods which is absolutely nothing to do with the appellants eligibility on these items. The impugned order goes a step further and takes up the issues which were never b .....

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nese company for different items of work. The supply of machinery is covered by one contract. In terms of such contract, the capital goods have been imported by the appellant and due duty has been discharged by the appellant. They have taken credit accordingly. There is a specific clause in the contract regarding transfer of title. The appellant will get the title when the goods delivered to them subject to payment of 80 % of contract price. The impugned order mentions about the contractor being .....

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