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2020 (12) TMI 911 - AT - Service TaxDistribution of CENVAT Credit - Cenvat Credit including Education Cess and SHE cess taken on the Research & Development services received to their manufacturing units - Rule 7 of Cenvat Credit Rules, 2004 - HELD THAT:- This Bench in its earlier judgement DR. REDDY’S LABORATORIES LIMITED VERSUS COMMISSIONER OF CUSTOMS CENTRAL EXCISE & SERVICE TAX, HYDERABAD [2020 (3) TMI 1276 - CESTAT HYDERABAD] has held that the services used in the R&D have a direct nexus with the manufacture of the final products. It is not necessary that the pharmaceutical industry has a complete R&D facility in each of its manufacturing units. In order to economise and benefit from the economies of scale, R&D units are set up as independent units for serving various manufacturing units of the manufacturer. In such a case, the services availed in the R&D units have a direct nexus to the manufacture of the products in various units. If the assessee is registered as an input service distributor, the CENVAT Credit availed on the services used in the R&D unit can be distributed to various manufacturing units. Appeal allowed - decided in favor of appellant.
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