TMI Blog2017 (4) TMI 152X X X X Extracts X X X X X X X X Extracts X X X X ..... tor themselves are not entitled to, the said cenvat credit cannot be transferred to anyone - appeal dismissed - decided against appellant. - E/55349/2013 Ex.(DB) - A/52640/2017-EX[DB] - Dated:- 30-3-2017 - Mr. Satish Chandra, President And Mr. Ashok K Arya, Member (Technical) Ms. Rohini Agarwal, Advocate for the Appellant Shri G.R. Singh, DR for the Respondent ORDER Per Ashok K. Arya 1. M/s Bharat Oman Refineries Ltd. is in appeal against the Order in Original no. 53/2012 dated 15.10.2012 passed by the Commissioner, Central Excise Service Tax, Bhopal whereunder Cenvat credit of ₹ 4,70,64,486/- alongwith interest has been disallowed and penalty equivalent of the credit amount has been imposed on the Appel ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ts i.e. the benefit of reduced rate of Service Tax under Composition Scheme and the benefit of CENVAT credit of duty paid on the inputs for the goods used in providing the service. (v) The department also claims that similarly the recipient of service also can not avail of CENVAT credit on such goods, lest the same may be inputs or capital goods, as the case may be, at their end (i.e. at the end of the recipient of service), since the value of the goods/inputs, etc. is subsumed in the value for calculating the Service Tax by the service provider under the Composition Scheme at reduced rate of Service Tax. (vi) During the course of Central Excise audit of the records of the Appellant conducted during the month of October 2010, it was n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 3. With this background we have heard both the sides The Appellant has been represented by ld CA Ms. Rohini Agarwal and Revenue has been represented by learned D.R. Shri GR Singh. 4. The main submission of the Appellant is that CENVAT credit of the goods which are part of the works contract, where the said credit has not been taken by their contractor Petron Engineering, it would be admissible to the Appellant assessee. In support, the Appellant relies on the decision of Hon ble Punjab Haryana High Court in the case of Commissioner Of Cus. C.Ex., Ghaziabad v/s Rathi Steel Power Ltd. (2015(321) E.L.T. 200(All.) 5. (i) The learned AR for the Revenue mainly submits that once the payment of option of service tax @ 4% of the gro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the gross amount charged for the works contract. 2 [Explanation. - For the purposes of this sub-rule, gross amount charged for the works contract shall be the sum, - (a) including - (i) the value of all goods used in or in relation to the execution of the works contract, whether supplied under any other contract for a consideration or otherwise; and (ii) the value of all the services that are required to be provided for the execution of the works contract; (b) excluding - (i) the value added tax or sales tax as the case may be paid on (Ii) the cost of machinery and tools used in the execution of the said works contract except for the charges for obtaining them on hire: Provided that nothing cont ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o the Appellant, M/s Bharat Oman Refineries Ltd. have opted payment of service tax under the Composite Scheme, where the value of the goods sold to them has been subsumed in the value of the taxable service, and when they have, thus availed the benefit of the reduced rate of service tax, the recipient of such services, who is the present Appellant namely M/s Bharat Oman Refineries Ltd. would not be entitled to take the CENVAT credit of the duty paid on the goods so sold to the provider of the works contract services, who in the present case is M/s Petrone Engineering Construction Ltd., the contractor to the Appellant M/s Oman Refineries Ltd. 6.2 Further, the Appellant M/s Bharat Oman Refineries Ltd. does not have any concern, connection ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion, they cannot directly or indirectly pass on the CENVAT credit of any input goods to the Recipient of their services. Under the CENVAT scheme the CENVAT credit is passed on by using the invoice documents, which are to be transferred to the buyer of the goods only. Here buyer of the goods is the contractor and not the Appellant M/s Bharat Oman Refineries Ltd. When the buyer M/s Petron Engineering Constructions Ltd., who is the contractor, cannot take CENVAT credit of their input goods, they are not eligible to pass on the CENVAT credit on the said input goods. In other words, the Cenvat credit to which the contractor themselves are not entitled to, the said cenvat credit cannot be transferred to anyone. 7. In the light of above discuss ..... X X X X Extracts X X X X X X X X Extracts X X X X
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