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2014 (11) TMI 33 - AT - Central Excise
Distribution of credit by the Input service distributor (ISD) - distribution of proportionate credit - Held that:- The combined reading of the Rule 7 and the clarificatory circular dt.23/8/2007 hereby 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 restriction 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 of the Cuttack Unit finds no mention in the relevant rules. As such, restricting the distribution of Service Tax credit in a manner as has been done by the impugned order by the lower appellate authority (original authority had approved of such distribution) cannot be upheld - appellant is entitled to take Cenvat credit during the impugned period as distributed by their head office - Therefore, the allegation of suppression, fraud, collusion, wilful misstatement or intent to evade payment of duty does not sustain. It is also supported by the Notification 18/12-CE dated 17.03.2012 wherein the Rule has been amended in the light of the decision of Ecof Industries (2009 (10) TMI 171 - CESTAT, BANGALORE) - Decided in favour of assessee.