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Issues involved:
- Denial of Cenvat Credit on Central Excise duty paid on pipes supplied by the appellant to EPC contractor. - Interpretation of Cenvat Credit Rules and applicability to the case. - Benefit of Notification No. 12/03 to EPC contractor and its impact on Cenvat Credit eligibility for the appellant. - Determination of whether the appellant is eligible for Cenvat Credit on the pipes supplied. Analysis: Issue 1: Denial of Cenvat Credit on Central Excise duty paid on pipes supplied by the appellant to EPC contractor. The appellant, engaged in gas transportation services, was denied the credit of Central Excise duty paid on pipes supplied to EPC contractor. The appellant contended that the pipes were purchased by them and used for laying pipelines, making them eligible for Cenvat Credit. The department's argument that the EPC contractor availed benefits under Notification No. 12/03, thus disqualifying the appellant from Cenvat Credit, was rejected. The Tribunal found that the appellant had received and used the pipes for providing services, akin to a manufacturer providing raw materials to a contractor for factory construction. The department failed to demonstrate non-compliance with Cenvat Credit Rules, supporting the appellant's eligibility for credit. Issue 2: Interpretation of Cenvat Credit Rules and applicability to the case. The appellant relied on Rule 3 of Cenvat Credit Rules, which categorizes pipes as capital goods eligible for credit. Additionally, Rule 9 allows for condonation of missing invoice details if essential particulars are present. The Tribunal emphasized that the appellant fulfilled the requirements for Cenvat Credit, as the documents contained necessary information. The appellant's argument, supported by legal precedents, highlighted the similarity between their case and scenarios where manufacturers provide materials to contractors for specific purposes, justifying Cenvat Credit eligibility. Issue 3: Benefit of Notification No. 12/03 to EPC contractor and its impact on Cenvat Credit eligibility for the appellant. The department argued that extending Cenvat Credit to the appellant would result in double benefits, as the EPC contractor already benefited from reduced service tax payment under Notification No. 12/03. However, the Tribunal focused on the appellant's eligibility for credit based on compliance with Cenvat Credit Rules, disregarding the contractor's benefits. The Tribunal deemed it inappropriate to consider the contractor's actions in determining the appellant's Cenvat Credit eligibility, emphasizing the appellant's fulfillment of credit requirements. Conclusion: The Tribunal allowed the appellant's stay petition unconditionally, recognizing a strong case for waiver of pre-deposit and stay against recovery of Service tax, Cenvat credit, interest, and penalties during the appeal. The detailed analysis affirmed the appellant's eligibility for Cenvat Credit on the pipes supplied, emphasizing compliance with Cenvat Credit Rules and justifying the waiver based on the presented facts and legal arguments.
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