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TMI Blog2009 (1) TMI 129X X X X Extracts X X X X X X X X Extracts X X X X ..... missioning of the machines at the premises of the buyers of said machines. The issue involved is common in respect of the three appellants and hence the appeals are taken together. Revenue is also in appeal against the orders of the Commissioner (Appeals) since it was held by Commissioner (Appeals) that no penalty is imposable since the issue involved is primarily the interpretation of statutory provisions and the charge of suppression or mis-declaration with intention to avoid duty cannot sustain in view several judgments on the said issue. The revenue's contention is that the Commissioner should have imposed penalty under Section 11AC to the extent of 100% of the Cenvat credit demanded and confirmed by the Commissioner (Appeals). 2. Shri ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and commissioning cost were included. In sales contract No. 22 dated 28-6-04, the price has been shown as ex-works, packing cost has been shown as included in the cost, installation and commissioning have been shown to be managed by the supplier and the cost is included in the basic price. He submits that in respect of all the machines sold on these terms, the cost of the machines included the cost of erection and commissioning also. He also drew my attention to the invoices submitted by them to show that the value includes all the costs and service has been provided to them. He also submits that Rule 2(L) of Cenvat Credit Rules does not require that the service has to be received in the manufacturer's premises to be eligible for Cenvat cre ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eard by both the sides and gone through the records. 4.1 In this case erection and commissioning charges have been included in the cost of the machines sold. The appellants have selected the agency to do this work and once the purchaser enters into an agreement for supply of the machine including the erection and commissioning charges, the responsibility for erection and commissioning is of the manufacturer. Therefore what is happening in this case is that the supplier of the machine is not only selling the machine but is also providing the service of erection and commissioning. Once erection and commissioning cost is included, in the transaction value, the natural conclusion that would emerge is that the processes undertaken in the buyer' ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cture. 4.2 Another point that has been relied upon by the revenue is that service tax credit is not admissible since the erection and commissioning activity is a post removal/post manufacturing activity. I have already mentioned earlier that in the case of service tax what is required to be examined is whether the service has been used in or in relation to manufacture directly or indirectly. While the eligibility for service tax credit on outward transport services is to be examined in connection with place of removal, there is no such requirement as regards other services. In respect of other services what is to be examined is whether they can be held to be rendered in or in relation to manufacture directly or indirectly. Once the whole t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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