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2016 (1) TMI 21 - AT - Central ExciseDistribution of Cenvat Credit of input services received at Head office - Input Service Distributor (ISD) - credit exclusive related to one unit (which exempted) and distributed to other unit - Held that:- In terms of Rule 7(b), the service tax attributable to service used in a unit 'exclusively' engaged in the manufacture of exempted goods is not available. The expression 'exclusively' appearing in the said Rule relates to the unit and not to the service tax. The unit has to be exclusively engaged in the manufacture of exempted goods meaning thereby that if service tax stands utilized in a unit which is manufacturing exempted as also dutiable goods, the said Rule will have no application. The expression "exclusively" is not associated with the word "service tax" as suggested by the learned advocate. The credit of service tax in respect of services used in the said Rudrapur unit is not available to the appellant's ISD. The order of the lower authorities to that extent, disallowing proportionate credit is upheld. Levy of penalty for wrong utilization of credit - Rule 15(3) of the CENVAT Credit Rules - Held that:- The period involved in the present appeals is April 2006 to April 2010. - The said Rule provided maximum penalty of ₹ 2000/- While confirming the demand of credit, penalty reduced - Decided partly in favor of assessee.
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