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TMI Blog2014 (2) TMI 639X X X X Extracts X X X X X X X X Extracts X X X X ..... e duty on goods manufactured at their factory at Alibag. The officers of the appellant firm, in their statements recorded also admitted to taking CENVAT Credit without proper supporting documents and on services which were exclusively for trading activity. The amount of credit so taken was quantified at Rs.2,42,02,704/-. It was further observed that the Head Office of the appellant had distributed CENVAT Credit of service Tax paid on input services to the Alibaug factory without getting themselves registered as Input Service Distributor (ISD) and even though the services were availed by the factories at Alibaug, KanjurMarg and Silvassa, the entire credit was taken at the Alibaug factory. The CENVAT Credit so taken amounted to Rs.2,92,78,755/-. It was further noticed that the appellant had availed CENVAT Credit without being in possession of proper documents as prescribed under Rule 9 of the Cenvat Credit Rules, 2004 and the credit taken without proper supporting documents amounted to Rs.2,88,89,730/-. It was also noticed that the appellant had taken credit twice in respect of a sum of Rs.8,19,902/- and, therefore, the credit taken second time was liable to be recovered. It was also ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he manufacture of both dutiable and exempted goods. The appellant is entitled to avail the entire Service Tax credit on such services. (ii) As regards the services received from M/s Interarch Building Product Pvt. Ltd., this service was also received in the construction of the proposed vitrified tiles godown within the factory at Alibag. Since the service is notified under Rule 6(5) of Cenvat Credit Rules, 2004, the appellant is eligible to avail the entire Service Tax credit. Without prejudice to the above, it is submitted that if at all the credit of Service Tax paid on construction service can be denied, it can be only to the extent attributable to the traded goods. (iii) With regard to the service received from M/s Iffco Tokyo General Insurance, it is contended that the insurance taken pertained to not only traded goods but also to goods manufactured and sold by the appellant and the appellant had taken credit only on pro-rata basis to the extent attributable to manufactured goods and the credit attributable to the traded goods amounts to only Rs. 7,37,036/-. (iv) As regards the services received through TCI Supply Chain Solution, they ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d, therefore, they have taken CENVAT Credit correctly in respect of such services. (viii) With regard to denial of CENVAT Credit amounting to Rs. 2,88,89,713/- specified in Annexure C to the notice, this credit has been denied on the ground that the credit has been taken on the basis of improper documents., on strength of which the credit was taken, were improper. They had made available all the original tax invoices of the service providers pertaining to the credit in dispute to the department and these documents amounted to 2512 documents. However, in respect of 2203 documents involving the credit or Rs. 2,45,45,648/- the only ground for denial of the credit is "no proper document" without pointing out the discrepancies in these documents. (ix) With regard to the denial of credit of Service Tax paid amounting to Rs.20,04,910/- specified in Annexure-D to show-cause notice, it is submitted that for the purpose of stay the appellant is not pressing this issue. (x) As regards the demands raised in Annexure E & F to the show-cause notice, these stand already reversed and is included in the amount of Rs.3,23,60,407/- reversed by them during the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion and M/s Interarch Building Product Pvt. Ltd., the credits were taken as per the statements received from the Head Office without the invoices. 4.4 Similarly, Shri Subhash Pednekar, Senior Executive Accounts, whose statement was recorded under Seciton14 of the Central Excise Act also confirmed that they used to prepare the monthly statement regarding payment of Service Tax which has to be availed as CENVAT Credit and forwarded the same to the factory for availment of credit. He also confirmed that although at the depots both imported vitrified tiles were traded along with the manufactured goods, the Service Tax paid on all the services used at the depot were included in the statements forwarded form the factory for availing of credit. It has been further admitted by him that Service Tax credit was taken at the factory without ensuring that the said services were input services used in or in relation to manufacture of excisable goods and a common services used by the Head Office for both trading purposes and in relation to manufacture of excisable goods were sent to the factory for availment of credit. He further admitted that even though services were received and used in the H ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... vailed by the appellant, bulk of it pertains to traded goods and, therefore, the appellant could not have taken credit in respect of this service for the manufacturing activity undertaken at their Alibag factory. 5.2 With regard to demand of Rs. 2,92,78,755/- this pertains to the credit distributed by the Head Office was not registered as an Input service Distributor and, therefore, the distribution of the credit by the Head Office without being registered as ISD is against eh provisions of Cenvat Credit Rules, This tribunal in the case of Mangalore Refinery & Petrochemicals vs. CCE, Mangalore - 2013 (30) STR 475 (Tri-Bang), Hardik Founders & Engineers (P) Ltd. vs. Commissioner of Central Excise, Pune-I - 2012 (26) STR 322 (Tri-Mum) and Khaitan Electricals Ltd. CCE, Kolkata- VE 2011 (21) STR 184 (tri-Kol) had consistently taken a view that the Service Tax credit can be distributed only if the services were received at the manufacturing premises and if it is received elsewhere, it is not permissible to avail of the Service Tax credit. Input Service Distribution scheme is a special scheme and if anyone wants to avail the benefit thereof, the terms and condition should be complied wi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ufacturing activity. Further, in respect of other input services, these included services received at the depots for which payments were made at the depots itself. However, no reconciliation was done as to confirm whether the bills/documents with regard to the service tax paid pertained to the Alibag factory or not. Similarly, Sri Subash Pednekar, Senior Executive (Accounts) has also confirmed the above position in his statement dated 11-8-2011. He has also confirmed that at the depots both imported vitrified tiles and manufactured tiles were traded and Service Tax paid on all services were included in the statement forwarded to the Alibag factory for cenvat credit availment. Similarly in the case of common services used by the Head Office which were exclusively used for trading of imported vitrified tiles, service tax paid thereon was included in the statement forwarded to the Alibag factory. Sri Bhanu Prakash Sharma, Manager (Warehouse) has, in his statement before the investigating authorities, admitted that the appellant had availed service tax credit on common issue such as advertising, security, accounting, courier, insurance, telephone, tours and travel, man-power supply, fo ..... X X X X Extracts X X X X X X X X Extracts X X X X
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