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2023 (6) TMI 242 - CESTAT HYDERABADCENVAT Credit - input services - Appellant has taken credit for services used in their Visakhapatnam Plant - Appellant has utilized this Cenvat Credit by transferring the Cenvat Credit by way of ISD challans mainly to their Bhilai unit and also to some other units - principle of prorata distribution of Cenvat Credit followed or not. Whether the Appellant is eligible for Cenvat credit taken by them for the input services received by them in their Visakhapatnam unit which has ultimately resulted in coming into existence of their immovable property? - HELD THAT:- The issue is no more res integra. The Hon’ble High Court of Punjab & Haryana in the case of COMMISSIONER CENTRAL EXCISE COMMISSIONERATE, DELHI-III VERSUS M/S BELLSONICA AUTO COMPONENTS INDIA P. LTD. [2015 (7) TMI 930 - PUNJAB & HARYANA HIGH COURT] has held that The land was taken on lease to construct the factory. The factory was constructed to manufacture the final product. The land and the factory were required directly and in any event indirectly in or in relation to the manufacture of the final product and for the clearance thereof up to the place of removal. But for the factory the final product could not have been manufactured and the factory needed to be constructed on land. The land and the factory are used by the manufacturer in any event indirectly in or in relation to the manufacture of the final product, namely, metal-sheets. The respondents’ case, therefore, falls within the first part of Rule 2(l) aptly referred to by Mr. Amrinder Singh as the “means part.” The Tribunal and Hon’ble High Courts have been consistently holding that Cenvat credit is eligible for the services used even for the immovable property when the period on dispute is prior to 01.04.2011. In the present case, the period of dispute is from 2006-07 to 31.03.2011. Therefore, respectfully following the above decisions, we hold that the Appellant is eligible for Cenvat credit of Rs.4,18,68,904/-. In respect of input service distributed by the Appellant to their other units, it is found that the Board vide their Circular dt.16.02.2018 have considered in detail the judgments of Hon’ble High Court of Gujarat in the case of COMMISSIONER OF CENTRAL EXCISE VERSUS DASHION LTD [2016 (2) TMI 183 - GUJARAT HIGH COURT] and Hon’ble High Court of Rajasthan in the case of COMMISSIONER CENTRAL EXCISE COMMISSIONERATE, JAIPUR VERSUS NATIONAL ENGINEERING INDUSTRIES LTD. [2016 (5) TMI 12 - RAJASTHAN HIGH COURT] and they accepted these decisions - it was held in DASHION LTD has held that The first objection of the Department therefore that the credit from one unit was utilized for the purpose of duty liability of other unit without prorata distribution by the input service distributor therefore would not survive in view of no previous restriction of this nature flowing from Rule 7 of the Rules of 2004. In fact, the Tribunal has seen entire situation as a Revenue neutral, since as pointed out by the assessee, it had availed only 20% of the credit for payment of service tax and the balance was paid in cash. After going through the judgments of the Hon’ble High Courts as well as Board Circular, it is clear that the matter is no more res integra. As the Department has already accepted the decisions of these Hon’ble High courts and no further Appeals have been filed and the Circular dated 16.02.2018 has been issued to the Department to follow the same in their future proceedings, there is no error on the part of the Appellant in distributing the Service Tax to any of the units, during the period under dispute (2006 to 2011). Appeal allowed.
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