TMI Blog2015 (1) TMI 1093X X X X Extracts X X X X X X X X Extracts X X X X ..... ms of Section 66A, will not change the complexion of the said services from input services to output services for the purpose of Cenvat Credit Rules, 2004. If such services are otherwise used as input services by the manufacturer of an excisable product or provider of an output taxable service, the Cenvat credit of service tax paid by the service recipient would be available to him. 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. Th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... voke the longer period of limitation. Accordingly, we hold the demand as barred by limitation. - impugned order is set aside - Decided in favour of assessee. - E/56/2009-EX(DB) - Final Order No. A/52148/2014-EX(DB) - Dated:- 16-5-2014 - Ms. Archana Wadhwa, Member (J) and Manmohan Singh, Member (T) Shri B.L. Narasimhan, Advocate, for the Appellant. Shri S.K. Panda, JCDR, for the Respondent. ORDER As per facts on records, the appellants are the manufacturer of CDR, CD Rom, DVDR and DVD Rom, falling under Chapter Heading 85 of the Central Excise Tariff Act, 1985, in their factory situated at A-164, Sector 80, Noida. They have their head office located at 43-A, Okhla Industrial Estate-II, Delhi. The said head office is registered as an input service distributer in terms of Rule 2(m) of the CENVAT Credit Rules, 2004 with effect from 12-7-2005. Various services like Management Consultant Service , Consulting Engineering Service and others, were being received by them from foreign country and as the recipient of the said services, service tax was being paid by the head office, in terms of the provisions of Section 68(2) read with Rule 2(1)(d)(v) of Service Tax Ru ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ty in respect of the services so received by them in terms of the provisions of Section 68(2) of the Act. In terms of the provisions of Rule 3(i) of the Cenvat Credit Rules, 2004, the manufacturer of the final products or a provider of taxable service shall be allowed to take Cenvat credit of service tax paid on any input service received by him. The Commissioner has observed that inasmuch as the head office is neither a manufacturer/producer of the final product, nor a provider of the taxable service and as such the head office will not be entitled to avail the credit of the amount of service tax so paid by them under Section 66(A) of the Act, being recipient of the services. For the above findings, the Commissioner has referred to the Board s clarifications as contained in Circular No. 345/4/2005-TRU, dated 3-10-2005. On going through the said circular, first of all we find that the same stands issued in relation to the liability of a person to discharge the service tax in respect of GTA services so received by a person who is neither a manufacturer nor service provider. It is seen that the issue as to whether a person who is liable to pay service tax under Section 68(2) would ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ppreciation, the said Rule is reproduced below :- input service distributor means an office of the manufacturer or producer of final products or provider of output service, which receives invoices issued under Rule 4A of the Service Tax Rules, 1994 towards purchase of input services and issues invoice, bill or, as the case may be, challan for the purposes of distributing the credit of service tax paid on the said services to such manufacturer or producer or provider, as the case may be; Further, Rule 7 of the said Rules read as under :- RULE 7 Manner of distribution of credit by input service distributor. - The input service distributor may distribute the CENVAT credit in respect of the service tax paid on the input service to its manufacturing units or units providing output service, subject to the following condition, namely :- (a) The credit distributed against a document referred to in rule 9 does not exceed the amount of service tax paid thereon; or (b) Credit of Service Tax attributable to service use in a unit exclusively engaged in manufacture of exempted goods or providing of Credit shall be taken by the manufacturer on the basis of the invoice ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... put service distributor, the appellants factory located at Noida was entitled to the credit of the service tax paid by them through their head office, as all the accounts are being maintained at the head office. 9. It may also be observed here that the credit on the input services is not dependent upon the actual receipt of the services in the factory unlike the credit of the duty paid on the inputs, which is dependent upon the actual receipt of the inputs or the capital goods in their factory. As such, when the services were first received by the head office and then transferred to the factory for further utilisation, cannot be made ground for denial of the credit. 10. Ld. Advocate appearing for the appellants has also relied upon various decisions of the Tribunal to support his plea that there is no restriction in availment of credit on the basis of the invoices issued by the input service distributor. Reliance stands placed upon the Tribunal s decision in the case of TVS Motors Co. Ltd. v. CCE, Chennai [2011-TIOL-455-CESTAT-MAD] laying down that there is no requirement to distribute the credit proportionately and one unit can avail more credit than the other factory. To t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . We really fail to appreciate the reasoning of the Commissioner that as the appellants were availing the credit on the strength of the documents/advices issued by their head office, but they were fully aware of the every aspect related to the payment of service tax being made by the head office. Inasmuch as the credit was being availed on the basis of the invoices issued by registered input credit distributor and were being reflected by the assessee in their statutory returns, we find that no positive suppression having the colour of mis-statement or with any mala fide can be attributed to them so as to invoke the longer period of limitation. Accordingly, we hold the demand as barred by limitation. Reliance can be made to two leading decisions of the Hon ble Supreme Court in the case of Collector of Central Excise v. Chemphar Drugs Liniments [1989 (40) E.L.T. 276 (S.C.)] as also to the decision in the case of Pushpam Pharmaceuticals Company v. CCE, Bombay [1995 (78) E.L.T. 401 (S.C.)], laying down that for invocation of extended period of positive suppression or mis-statement with an intent to evade payment of duty is pre-requisite condition. 12. In view of the foregoing, ..... X X X X Extracts X X X X X X X X Extracts X X X X
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