TMI Blog2014 (2) TMI 823X X X X Extracts X X X X X X X X Extracts X X X X ..... condition of Rule 7 of the said Rules. In our considered view, the adjudicating authority rightly proceeded on the basis that in this case, ISD should be distributed based on the template of sale revenue of individual unit, when other units are exclusively exempted unit. Prima facie, there is no material available that the method of distribution of service tax credit was known to the department - The applicant failed to make out a prima facie case for waiver of predeposit of entire amount of duty along with interest and penalty - Conditional stay granted. - E/40205/2013 - MISC ORDER No.42956, 42957/2013 - Dated:- 31-12-2013 - Shri P.K. Das and Shri Mathew John, JJ. For the Appellant : Shri R. Raghavan, Advocate For the Respon ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oses conditions for distribution of the credit under Rule 7 of C.C.R. In the show cause notice, there is no allegation of violation of any of the conditions of the CCR. It is submitted that entire credit was denied on the basis of paper presented under the title "Distribution of service tax credit by input service distributor under CENVAT Credit Rules, 2004" by Shri M. Gopalakrishnan, Chairman of Technical Committee of Diamond Jubilee Celebrations, ICWAI. He submits that credit was denied following the ratio of methods of adopting clearance value, which has no sanctity of law. It is also contended that demand is barred by limitation. There is no allegation of suppression of facts of availment of credit in the show cause notices. He further ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he method of distribution of credit to the department and it is a clear case of suppression of facts with intent to evade payment of tax. 5. After hearing both sides and on perusal of the records, we find that it is appropriate to reproduce relevant provisions of Cenvat Credit Rules, 2004 as under :- RULE 6. Obligation of a manufacturer or producer of final products and a [provider of output service. (1) The CENVAT credit shall not be allowed on such quantity of [input used in or in relation to the manufacture of exempted goods or for provision of exempted services, or input service used in or in relation to the manufacture of exempted goods and their clearance upto the place of removal or for provision of exempted services], except i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... manufacturer in the manufacture of final products. Rule 6 of the said Rules provides a condition that cenvat credit shall not be allowed on the inputs or input service used in or in relation to the manufacture of exempted goods. Clause (b) of Rule 7 of the said Rules make it clear that while distributing the credit by input service distributor, credit of service tax attributable to the units exclusively engaged in manufacture of exempted goods shall not be distributed. On close reading of these rules, it is seen that the bar imposed under Rule 6 would be taken into account while distributing the credit by ISD under Clause (b) of Rule 7 of the Rules. In the present case, there is no dispute that the other units of input service distributor ..... X X X X Extracts X X X X X X X X Extracts X X X X
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