Custom, Excise & Service Tax Tribunal Indian Oil Corporation Limited vs Bbsr Commissionerate on 20 December, 2023 IN THE CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL, KOLKATA EASTERN ZONAL Excise/Misc. No. 75762 of 2023 And Excise Appeal No. 75115 of 2022 (Arising out of the OrderinOriginal No. PR.COMMR/BBSR/CE/04/2021 dated 29.11.2021 passed by Principal Commissioner of CGST & Central Excise, Bhubaneshwar.) M/s Indian Oil Corporation Limited, Paradip Refinery, P.O. Jhimini, Vill.Kunanga, Dist.Jagatsinhpur, Odisha754141. ...Appellant (s) VERSUS Commissioner of CGST & Central Excise, Bhubaneswar, C. R. Building, Rajaswa Vihar, Bhubaneshwar Odisha751007. . ...Respondent(s) APPERANCE : Shri Deepro Sen & Mr. Shovit Betal, Advocate for the Appellant Shri S. Mukhopadhyay, Authorized Representative for the Respondent HON'BLE MR. R. MURALIDHAR MEMBER (JUDICIAL) HON'BLE MR. K. ANPAZHAKAN MEMBER (TECHNICAL) Misc. Order No. ...75749/2023 & Final Order No.77735/2023 DATE OF HEARING : 20.12.2023 DATE OF DECISION : 20.12.2023 PER K. ANPAZHAKAN : The present appeal has been filed against the impugned Orderin Original No. PR. COMMR/BBSR/CE/04/2021 dated 29.11.2021, wherein Cenvat credit amounting to Rs. 183,36,81,368/ proposed in the Notice was disallowed along with demand of interest and imposition of Penalty of Rs. 183,36,81,368/ under Rule 15 of the CENVAT Credit Rules, 2004 (CCR) read with Section 11AC of the Central Excise Act, 1944 (CER). 2 Excise Appeal No. 75115 of 2022 2. M/s. Indian Oil Corporation Limited (hereinafter referred to "Appellant") is a PSU engaged in the manufacture of various petroleum products falling under Chapter 27 of the 1st Schedule to the erstwhile Central Excise Tariff Act, 1985. The Appellant during the relevant period entered into two Build, Own, Operate and Transfer (BOOT) agreements with the following contractors for the below mentioned purposes: M/s IL&FS Construction, operation and maintenance of Paradip infrastructure facility for transportation of water Refinery Water from upstream of Zorba Barrage of Mahanadi Limited River at Cuttack to Paradip Refinery to meet the water requirement of the said refinery. M/s. IOT Utkal Construction, operation and maintenance of Energy Services tankage facilities. Limited 3. The Appellant paid monthly fixed charges towards return on capital investment as well as variable charges as "consideration" in relation to the aforementioned agreements and service tax was charged thereon. The Appellant availed CENVAT credit of such service tax paid. A SCN dated 17.06.2020 was issued by the Principal Commissioner, CGST & Central Excise, Bhubaneswar questioning the CENVAT credit of Rs. 1,83,36,81,368/ availed by the Appellant during the period 201516 to 201718 (up to June 2017), primarily on the ground that no service is rendered by the contractors to the Appellant in so far as the monthly fixed charges are concerned since these are in the nature of reimbursement of capital investment and not towards the provision of any service. The Notice was adjudicated vide the impugned Orderin 3 Excise Appeal No. 75115 of 2022 Original dated 29.11.2021, wherein Cenvat credit amounting to Rs. 183,36,81,368/ proposed in the Notice was disallowed along with demand of interest and imposition of Penalty. Aggrieved against the impugned order, the Appellant has filed the present appeal. 4. In their grounds of appeal, the Appellant submits that in the instant case Cenvat credit has been denied to them on the sole ground that no service has been rendered by the contractors to the Appellant and the amount paid by the Appellant is in the nature of reimbursement of capital investment and not towards the provision of any service. It is a settled proposition of law that Cenvat credit cannot be denied to service recipient when payment of service tax is not disputed by the department at the service provider's end. 5. In this regard, the Appellant placed their reliance on the following rulings: · M/s Hindalco Industries Limited vs. Commissioner of Customs, Central Excise & Service Tax, Rourkela, 2023 (12) TMI 117 CESTAT KOLKATA,