TMI Blog2011 (10) TMI 389X X X X Extracts X X X X X X X X Extracts X X X X ..... - SUPREME COURT)). - appellant directed to pre-deposit. - E/1526/2010 - S/116/WZB/MUM/2011/SMB/C-IV - Dated:- 12-10-2011 - Shri P.R. Chandrasekharan, J Represenred by: Shri S Chandrashekharan, Assistant Manager for Appellant Respondent Rep by: Shri A K Prabhakar, Supdt. (AR) Per: P R Chandrasekharan: The appeal and stay application are directed against Order-in-Appeal No.P-I/VSK/64/2010 dated 08.04.2010 passed by the Commissioner of Central Excise (Appeals), Pune-I. 2. The facts arising for consideration are as follows: - The appellant M/s Mahidnra Mahindra Ltd., Kanhe, Pune are manufacturer of Motor Vehicle Parts falling under Chapter 87 of the Central Excise Tariff Schedule. They have another manufacturing uni ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dit Rules, 2004 for distribution of input Service Tax to a unit even though such input service might not have been availed by the said unit; so long as the input service tax is eligible to be distributed to any unit of the appellant. He relied on the judgment of the Hon'ble High Court of Karnataka in the case of Commissioner of Central Excise, Bangalore-I Vs. ECOF Industries Pvt. Ltd. reported in 2011 (271) ELT 58 (Kar), wherein the Hon'ble High Court held that merely because the input service tax is paid at a particular unit and the benefit is sought to be availed at another unit, the same is not prohibited under law. Once the manufacturer is registered as an Input Service Distributor, he is entitled to distribute credit of such input in t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ble Apex Court has held that "unless and until the said input is used in or in relation to the manufacture of final product within the factory of production, the said item would not become an eligible input. The said expressions 'used in or in relation to the manufacture' have many shades and would cover various situations based on the purpose for which the input is used. However, the specified input would become eligible for credit only when used in or in relation to the manufacture of final product." In Rule 2(1) of Cenvat Credit Rules, input service has been defined as follows: - "(1) "input service" means any service,- (i) used by a provider of taxable service for providing an output service; or (ii) used by the manufacturer, whet ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... se of availing credit. The input service distributor can distribute the Service Tax paid on input services amongst its various units only if such services are used among the units where the credit is taken. First of all the service has to qualify as an input service and thereafter, the tax can be distributed. The purpose of providing input service tax distribution is in the context of common services availed by various units of a single corporate entity. It is not mechanism for transfer of credit from one unit to another. If the appellant wanted such facility, then they should registered themselves as a Large Tax Payer unit and only when they register as a Large Tax Payer unit, they could transfer credit from one unit to another. The judgme ..... X X X X Extracts X X X X X X X X Extracts X X X X
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