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TMI Blog2015 (1) TMI 1093X X X X Extracts X X X X X X X X Extracts X X X X ..... )(d)(v) of Service Tax Rules, 1994. The service tax so paid by them on the various services, which were actually being utilised by the appellants in their factory located at Noida, were being distributed by the head office to the appellants' factory. Appellants were availing the CENVAT credit of the service tax so paid by the head office and distributed by them and were utilising the same for discharge of their service tax liability. It is seen that during the period August, 2005 to February, 2006, the appellants availed the CENVAT credit of Rs. 3,16,58,382/- on the basis of the invoices issued by their head office, transferring the entire service tax paid by them from the head office to the appellants' factory. 2. Revenue entertained a view that inasmuch as the service tax was being paid by the head office, as a deemed service provider, on reverse charge basis and inasmuch as the head office was not engaged in the manufacture of any excisable goods or not providing any output services, they were not entitled to avail the said credit and in turn not entitled to pass on the said credit to the appellants' factory located at Noida. Accordingly, proceedings were initiated against ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er Section 68(2) would be entitled to the credit of the same or not stands clarified by the Board in subsequent circulars so issued by them. Circular No. 21/JAM/2008 (S. Tax), dated 6-8-2008 refers to the earlier clarificatory letter of the Board being F.No. B1/4/2006-TRU, dated 19-4-2006, which is to the effect and makes it clear that where such services were used as an input for providing any taxable output, the service tax paid on such service can be taken as an input credit. The Commissioner has relied upon the earlier circular, dated 3-10-2005, which is not on the issue and has ignored the other subsequent clarifications given by the Board. 5. On going through the provisions of Section 66, we find that the same is charging Section and provides for levy of service tax on the taxable services referred in Section 65(105). In respect of the services so specified in Section 65, clause 105, if provided by a person located in a country other than India and received by a person located in India, the same has to be treated as per Section 66A, as if the recipient of the services has himself provided the said services in India and he is required to pay service tax under Section 66A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l be taken by the manufacturer on the basis of the invoice, bill or challan issued by the 'input service distributor'." 7. In the light of the above Rules, a head office is entitled to get himself registered as input service distributor and then to issue invoices/bills for the purpose of distributing the credit of service tax. There is nothing in the said Rule to suggest that the head office or the office of the manufacturer should be himself in a position to provide any output service or to manufacture any excisable goods. The basic requisite condition for the distribution of the said credit is that he receives the invoices towards purchase of input services and pays the service tax. Admittedly, in the present case, the head office has received the disputed services of "Intellectual Property Service", "Consulting Engineering Service" and "Management Consultant Service" and has discharged its service tax liability as a recipient of the said services. The head office is admittedly registered with the Department as input service distributor. Being a registered input service provider, the head office was admittedly entitled to distribute the credit to its manufacturing unit. 8. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nately and one unit can avail more credit than the other factory. To the same effect is the Tribunal decision in the case of Ecof Industries Pvt. Ltd. v. CCE, Bangalore [2010 (17) S.T.R. 515 (T)] by laying down that there is no restriction which can be applied in limiting distribution of service tax credit made in respect of Malur unit on the ground that services were used in respect of Cuttack unit. The said decision stands upheld by the Hon'ble High Court of Karnataka reported in 2011 (23) S.T.R. 337 (Kar.) = 2011 (271) E.L.T. 58 (Kar.). Further reference has also been made to the Hon'ble High Court of Punjab & Haryana in the case of CCE, Ludhiana v. Ambika Overseas [2012 (25) S.T.R. 348 (P & H)] laying down that the services provided by overseas commission agents where activities relating to sales promotion and the assessee is entitled to take CENVAT credit of service tax paid by them as recipient of those services. Though the above decisions do not cover the disputed arena directly, but it emerges that even where an assessee has paid service tax, as recipient of the services from a foreign country, he is entitled to take the credit of service tax actually paid by him. Further, ..... X X X X Extracts X X X X X X X X Extracts X X X X
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