9911796707
TMI Blog2014 (1) TMI 612X X X X Extracts X X X X X X X X Extracts X X X X ..... reshed tobacco to the manufacturing facilities of the appellant. ILTD purchases leaf tobacco at auctions, gets them threshed and after threshing and segregation of leaf and stem, stores the same in different warehouses and supplies to the factories of ITC Ltd. The ILTD avails services such as storage and warehousing, transport to warehouse from threshing plants and from warehouses to factories, security services and accounting services. ILTD obtained registration as an Input Service Distributor under CENVAT Credit Rules, 2004 in 2006. During the course of audit of records of the appellant ITC Ltd., it was noticed that appellant had availed input service credit passed on by ILTD. Taking a view that the availment of CENVAT credit of service t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the contention of the department that the service tax paid by ILTD and distributed to be availed as credit by the factories of ITC Ltd. are not at all the service tax amount paid in respect of activities undertaken by ILTD prior to the completion of threshing and segregation of leaf and stem. The credit of service tax passed on related to the activities which are undertaken by ILTD which are namely storage of processed tobacco in warehouses by transporting them from the threshing and segregation facilities and thereafter service availed for storage in warehouses and transportation from warehouses to the factories. Therefore the service tax paid cannot be relatable to the product which suffers 'nil' rate of duty. He submits that procurement ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... AR before us. The learned counsel from the reply to the show-cause notice showed us that this claim was made by the ITC Ltd. before the original authority and original authority has not got any verification done or has not contradicted this stand anywhere. In the absence of any evidence to show that credit distributed related to pre-threshing activities, the stand taken by the Revenue that the credit was not admissible therefore could not be distributed prima facie cannot be sustained. Similarly there is no evidence to show that ILTD is not a division of ITC Ltd. We are also inclined to accept the submissions that ILTD can be considered a branch or an office of the manufacturer in terms of definition of Input Service Distributor. Prima faci ..... X X X X Extracts X X X X X X X X Extracts X X X X
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