2024-VIL-808-CESTAT-KOL-CE
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CENTRAL EXCISE CESTAT Cases

Central Excise - Entitlement to CENVAT Credit on capital goods received under the works contract on sale basis - Denial of CENVAT Credit on capital goods on the ground that supplier had opted for payment of service tax on all the contracts under ‘works contract service’ wherein supplier is restricted from availing CENVAT Credit on the ‘inputs’ used in works contract service – Revenue alleged that the capital goods on which the appellant had availed CENVAT Credit becomes the inputs for supplier who is restricted from availing CENVAT Credit and thus, appellant is not entitled to avail CENVAT Credit on such goods - whether appellants are entitled to take CENVAT Credit on capital goods – HELD - the capital goods have been procured by the appellant/Tata under a separate contract, on payment, which has become the property of the appellant and the same has been handed over by Tata to L&T for installation and commissioning. L&T paid Service Tax on the said activity without taking CENVAT Credit on inputs used in providing the said service. In these circumstances, the goods remain the property of the appellant namely, Tata during the impugned period – the said capital goods which were installed in the factory of the appellant have been used for manufacturing of their final product. Therefore, appellant-Tata steel has correctly taken CENVAT Credit on the capital goods procured by them which have been ultimately used in the manufacture of final products - the denial of CENVAT Credit is not sustainable and set aside - As the appellant-Tata has taken CENVAT Credit correctly, no penalty is imposable on the appellants. Consequently, the penalties imposed on all the appellants is set aside - the appeals are allowed
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