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2019 (4) TMI 430 - AT - Central ExciseCENVAT Credit - input service distribution - credit is sought to be denied on the ISD invoices on the ground that there is no nexus between the manufacture of final products and the services in question - Held that:- The definition of input service for the purpose of manufacture is very wide. Obviously, several activities such as sales promotion, marketing, legal services, accounting etc., may not be handled in the factory but in the head office of the company. In such a case, the invoices will be received in the head office. Where the head office has more than one unit, provision has been made in Rule 7 of CCR, 2004 for the head office themselves to be registered as ISD and further distribute the credit to their manufacturing units. In case such service is attributable to only one unit, it has to be distributed to such unit only. Where such service can be attributable to more than one, it has to be distributed prorate to such units. Evidently, the scheme of CENVAT Credit Rules itself envisages the manufacturing unit in the field getting credit of services which are used in the head office, which will be indirectly relatable to the manufacture or which will not be directly relatable to the manufacture of final products in the field units. If the head office commits an error or plays mischief and wrongly distributes credit either by availing ineligible credit itself or by improperly distributing it can the recipient of the ISD invoices be able to correct the mistake? - Held that:- In my considered view, they will not be able to do so. They will also not be able to explain why the credit was wrongly taken or distributed by their head office - Even if this argument is accepted, no malafide such as fraud, collusion, wilful misstatement or suppression of facts can be attributed to the field office. Once they have accepted the ISD invoices issued by their head office in good faith. Extended period of limitation cannot be invoked and the entire demand is time barred in this case. Appeal allowed - decided in favor of appellant.
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