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TMI Blog2018 (6) TMI 1077X X X X Extracts X X X X X X X X Extracts X X X X ..... th the appeals are being decided through this common order. 2. The appellant is a refinery for the manufacture of petroleum products. During the period in dispute, Crude Oil Refinery project in District Sagar, M.P. was being set up and as part of setting up, the appellant awarded a lumpsum contract to M/s Driplex Water Engineering Limited (Contractor), the contractor for setting up RO-DM Water Plant at the premises of the appellant. The dispute also involved the works contract awarded to M/s Bridge & Roof Co. Limited for supply of fired heat for M.H. block (contractor). The contractor discharged service tax under the category of "Works Contract Service" as defined under Section 65 (105) (zzzza) of the Finance Act, 1994. The contractor paid ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... credit will be allowable in terms of Rule 2(a) of the Cenvat Credit Rules, 2004, in respect of all goods used in the factory of the manufacturer of the final products. All the capital goods for which credit has been availed are undoubtedly used by the appellant in his factory and hence the credit cannot be denied. He relied on the decision of the Tribunal in the case of Commissioner of Central Excise, Jalandhar vs. International Tractor Ltd. -2007 (220) ELT 155 (Tri. Del.) which was also affirmed by the Hon'ble High Court of Punjab & Haryana reported as 2010 (255) ELT 196 (P&H). Ld. Advocate emphasised that the ownership of the capital goods is immaterial in availing the cenvat credit on capital goods. In this connection, he relied on the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the period after 01.07.2012 cannot be sustained. He also reiterated the grounds of time bar. 5. Ld. AR appearing for the Revenue justified the impugned orders. He drew our attention to the Works Contract Composition Scheme and referred to the Explanation under Rule 3(i) in which it has been specified that the gross amount charged for the works contract shall be the sum including the value of all goods used in or in relation to the execution of works contract, whether supplied in other contract for consideration or otherwise. Accordingly, he submitted that the value of not only inputs but also capital goods are required to be included for payment of service tax under WCS Composition scheme and no cenvat credit on such goods can be allowed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ue of the goods used in or in relation to the execution of work contract get subsumed in the gross value of the work contract itself. The goods on which the appellant has taken cenvat credit were very much of the part of the said work contract, hence, once the contactor i.e. M/s Driplex Water was not entitled to avail cenvat credit in terms of sub-rule 3(2), the appellant is not entitled to avail the cenvat credit. 7. From the documents on record, it is apparent that goods on which the appellant has availed cenvat credit have been used by M/s Driplex Water for providing the works contract service. It was M/s Driplex Water who has issued purchase order and procured the goods from manufacturer/ dealer. Thus, it was M/s Driplex Water only who ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he appellant are not applicable to the present facts. The contract has paid service tax under the Composite Scheme, where they have paid service tax at the reduced rate of 4% instead of payment of standard rate of service tax @ 10%, when contractors in both the appeals have exercised this option, 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. The fact that invoice mentions the appellants as consignee and the goods were delivered direc ..... X X X X Extracts X X X X X X X X Extracts X X X X
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