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2018 (12) TMI 1300 - HC - Central ExciseInput tax distribution - intellectual property rights and I.T. software services were to he used by all the units of the respondent and not restricted only to the Pune unit - It is the case of the Revenue that the respondent-assessee should have distributed the tax credit to the various units situated across the country and should not have availed CENVAT credit only at Pune - Held that:- Both provisions give an option to the assessee concerned whether to distribute input services tax available to it amongst its other manufacturing units which are providing output services. This is evident from the use of word “may distribute the CENVAT credit” is found in Rule 7 both prior and also post 2012. Thus, from the reading of the Rules, the option was available to the assessee whether to distribute the CENVAT credit or not - on plain reading of Rule 7 as existing both pre and post amendment 2012 covering period involved in these proceedings, the respondent - assessee was entitled to utilize the CENVAT credit available at its Pune unit. The Tribunal, on facts found that the entire exercise would be revenue neutral. This is so as the distribution of Cenvat Credit to the various units would result lesser service tax being paid by cash on their activity of coating as they would have utilized the cenvat credit available for distribution - the question of law as proposed does not give rise to any substantial question of law as the entire exercise would be revenue neutral - appeal dismissed.
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