TMI Blog2014 (8) TMI 654X X X X Extracts X X X X X X X X Extracts X X X X ..... d the credit of service tax paid on advertisement. In that case, the appellant manufactured non-alcoholic beverage bases known as "concentrates". The concentrate was sold by the appellant to bottling companies who, in turn, sold aerated beverages from the concentrates to distributors who, in turn, sold to retailers for the ultimate sale to the consumer. The advertisement and sales promotion activities including market research was undertaken by the appellant. Revenue denied the credit on the ground that the advertisement did not relate to "concentrates" manufactured by the appellant. - it is apparent that input service credit on advertisement charges are related to the business of the assessee. Taking into account of the facts and circumstances of the present case, in so far as both the units are under the same manufacturer and the input service credit is related to the advertisement charges, "relating to business" of the same assessee, there is no reason to deny the input service credit to the appellants - Decided in favour of assessee. - Appeal Nos.E/539/2009, E/772/2010, E/773/2010 - FINAL ORDER No.40474-40476/2014 - Dated:- 8-8-2014 - Shri Pradip Kumar Das, J. For t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... enue loss. 4. On the other hand, Ld. Authorized Representative on behalf of Revenue submits that it is well settled by the decisions of the various High Courts and the Tribunal that the expression relating to business in Rule 2(l) of Cenvat Credit Rules, 2004 would apply to the activities integrally related to the business activity of the assessee and the credit would be available only if nexus between the relevant services and the business of the assessee is established. In the present case, Unit-I is manufacturing petrol engine and the advertisement for the other unit of diesel engine is of different activity and therefore Unit-I cannot avail the credit in the manufacturing activity of the Unit-II. He relied upon the decision of the Hon'ble High Court as under :- (1) CCE Nagpur Vs Manikgarh Cement - 2010 (20) STR 456 (Bom.) (2) CCE Ahmedabad Vs Cadila Healthcare Ltd. -2013 (30) STR 3 (Guj.) (3) TELCO Construction Equipment Co. Ltd. Vs CCE Cus Belgaum - 2013 (32) STR 482 (Tri.-Bang.) He further submits that the decision of the Tribunal in the case of Ecof Industries Pvt. Ltd (supra) would not apply to the present case as in th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e 7 of the Rules 2004 provides the manner of distribution of credit by input service distributor. In the case of Ecof Industries Pvt. Ltd. (supra), the issue involves whether the appellant is correct in distributing the credit of service tax in respect of their Malur Unit even though the service tax has been paid in respect of their Cuttack unit. The Tribunal while dealing with Rule 7 of Cenvat Credit Rules, 2004 and para 2.3 of the Master Circular of Service tax dt. 23.8.2007 held as under:- 8. The combined reading of the Rule 7 and the clarificatory Circular dated 23-8-2007 clearly shows that there are only two restrictions regarding the distribution of the credit. The first restriction is that the credit should not exceed the amount of Service Tax paid. The second restriction is that the credit should not be attributable to services used in manufacture of exempted goods or providing of exempted services. There are no other restrictions under the rules. The restrictions sought to be applied by the Department in this case in limiting the distribution of the Service Tax credit made in respect of the Malur unit on the ground that the services were used in respect ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing the relevant period, there was no restriction for utilisation of such credit without allocating proportionately to various units. The omission to take registration as an Input Service Distributor can at best be considered as procedural irregularity and in view of the decisions cited, has to be considered sympathetically. Further, it is also noticed that appellant has not got any extra benefit by doing this. In fact from the statement of Shri Chandresh C. Shah, as explained that above Cenvat credit available to them, 20% of service tax payable only was paid and balance was paid in cash. In fact, proper distribution would have enabled them to utilise full credit. It would show that the exercise is totally Revenue neutral and no loss has been caused to the Revenue (in fact Revenue has gained). In the absence of any legal requirement to avail credit based on the services received during the relevant time and in the light of the decision cited by the learned counsel, the procedural irregularity has to be ignored and the demand confirmed has to be set-aside on this ground. In the result, demand for Cenvat credit of ₹ 1,07,07,142/- with interest and penalty equal to the same imp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the service tax paid by him. Once the cost incurred by the service has to be added to the cost, and is so assessed, it is a recognition by Revenue of the advertisement services having a connection with the manufacture of the final product. This test will also apply in the case of sales promotion. 11. The inclusive part of definition of input service under Rule 2(l) of Cenvat Credit Rules, 2004, consists of advertisement or sales promotion ...., activities relating to business . The Hon'ble Bombay High Court in the case of Manikgarh Cement (supra) as relied upon by the Ld. A.R., held that cenvat credit of input service is allowable only if nexus between relevant services and business of the assessee established. In the present case, it is apparent that input service credit on advertisement charges are related to the business of the assessee. Taking into account of the facts and circumstances of the present case, in so far as both the units are under the same manufacturer and the input service credit is related to the advertisement charges, relating to business of the same assessee, there is no reason to deny the input service credit to the appellants. 12. According ..... X X X X Extracts X X X X X X X X Extracts X X X X
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