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2019 (3) TMI 2026 - AT - Service TaxCENVAT Credit - availment and distribution of credit - input services - Air Travel Agency - Membership & Club Association - Rent-a-cab - Event Management - Car Insurance - invocation of provisions of Rule 14 ibid read with Section 73 ibid for recovery of the alleged amount of Cenvat Credit availed by the appellant - HELD THAT:- The provisions for recovery of Cenvat Credit wrongly taken by the assessee are contained in Rule 14 ibid. The said statutory provision mandates that irregularly availed or utilized Cenvat Credit can be recovered from the manufacturer or the provider of output service. In this case, the corporate office of the appellant is registered with the service tax department as an Input Service Distributor and distributed the Cenvat Credit in respect of service tax paid on the input services among its manufacturing units. It is not the case of the department that the appellant is either avails or utilizes the Cenvat Credit of service tax paid on the input services. Input Service Distributor neither provides any service nor engages in manufacture of excisable goods. Thus, the question of payment of service tax or Central Excise duty on the taxable services or the manufacturing activities respectively do not arise. The provision of Rule 14 is applicable only to the manufacturer or service provider and not to the Input Service Distributor, who merely distributes the credit. Since, the provisions of Rule 14 ibid was invoked for effecting recovery of the Cenvat Credit amount from the appellant, such proceedings initiated by the department are not in conformity with the Cenvat statute and accordingly, both the orders passed by the lower authorities cannot be sustained. This Tribunal in the case of MAHINDRA & MAHINDRA LTD. VERSUS COMM. OF SERVICE TAX, MUMBAI [2017 (7) TMI 167 - CESTAT MUMBAI] has held that Rule 14 ibid can be made applicable only on the person who avails or utilizes the Cenvat Credit wrongly and the show cause notice cannot be issued to the Input Service Distributor for recovery of Cenvat Credit. The above disputed services were used/utilized by the appellant for accomplishing the business purpose of ultimate manufacture of final products, removed from the factory on payment of appropriate Central Excise duty. All the disputed services are falling under the definition of input service for taking of Cenvat Credit of service tax amount paid thereon. The issue with regard to consideration of the disputed services as defined ‘Input Service’ is no more res integra in view of the decisions relied upon by the Ld. Advocate for the appellant. Therefore, as per the settled principal of law, denial of Cenvat Credit on this ground also is not sustainable. There are no merits in the impugned order passed by the Ld. Commissioner (Appeals) - appeal allowed.
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