TMI Blog2014 (1) TMI 612X X X X Extracts X X X X X X X X Extracts X X X X ..... therefore could not be distributed prima facie cannot be sustained - there is no evidence to show that ILTD is not a division of ITC Ltd. - ILTD can be considered a branch or an office of the manufacturer in terms of definition of Input Service Distributor - Prima facie, service tax credit would be admissible since the service relates to procurement of inputs which is one of the activities entered by definition of service tax - the appellant has made out a prima facie case in their favour – Pre-deposits waived till the disposal – Stay granted. - Appeal No. 253/2012 - Misc. Order No. 25484/2013 - Dated:- 21-3-2013 - SHRI P. G. CHACKO AND SHRI B.S.V. MURTHY, JJ. For the Appellant: Mr K.S. Ravi Shankar, advocate For the Responden ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ity. Further department also took the stand that the goods processed and supplied by them are not excisable and ILTD is not providing any output service and therefore the service tax credit passed on by ILTD is attributable to services used in manufacture of exempted goods/goods attracting nil rate of duty and therefore credit could not have been passed on as per the provisions of Rule 7 of CENVAT Credit Rules. The proceedings initiated have culminated in the impugned order wherein the credit of service tax availed to the extent of Rs. 3,25,80,308/- has been denied and demanded with interest and penalty equal to the amount of service tax imposed. 2. Learned counsel for the appellant submitted that ILTD is not an independent entity as cl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tivities. The first one is procurement of leaf tobacco, threshing of the same and segregation of leaf and stem (preparation of tobacco to be fit for used as raw material for manufacture of cigarettes) and another one is storage and supply of such prepared raw materials to the factories. Therefore the availment of CENVAT credit and distribution of the same are perfectly legal. 3. The learned AR reiterates the stand taken by the department and upheld by the Commissioner as proposed in the show-cause notice namely ILTD is an independent entity; the credit is attributable to manufacturing activity resulting in exempted/nil rated goods; ILTD cannot be considered as an office of ITC Ltd.; inadmissible credit cannot be distributed and therefore ..... X X X X Extracts X X X X X X X X Extracts X X X X
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