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Commissioner Central Excise Commissionerate, Jaipur Versus National Engineering Industries Ltd.

2016 (5) TMI 12 - RAJASTHAN HIGH COURT

Cenvat credit - Common Input services belongs to three units but the whole of the credit was availed at one unit - Assessee contended that the units may be situated at different places but are under the common management and the Cenvat Credit has rightly been claimed. - Held that:- no substantial question of law arise out of the order of the Tribunal and the Tribunal has rightly found that all the three units had a common management and no contrary material was placed on record by the Commission .....

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g from Rule 7 of the Rules of 2004. The respondent has been able to prove that all the three units are one and the same, have common management and the Revenue has not been able to disprove this fact. - Decided against the revenue - DB Central Excise Appeal No.3, 4, 5, 6, 7, /2016 - Dated:- 8-2-2016 - MR. AJAY RASTOGI AND MR. J.K. RANKA, JJ. For The Appellant : Mr. Ajay Shukla, counsel 1. Instant Central Excise Appeals u/Sec. 35-G of the Central Excise Act, 1944 have been preferred against order .....

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e Tariff Act, 1985 and registered with the Central Excise Department. The assessee is having three units at Jaipur, Manesar and Niwai and its Central Head Office is at Jaipur. The assessee availed Cenvat Credit on certain services like Selling Commission, Royalty, Consultancy & Professional, Banking Charges, Audit Fee, AMC Charges etc. on which service tax was paid and invoices were raised in the name of the Head Office. The Jaipur unit of the assessee has taken Cenvat Credit on all these se .....

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ected to the said show cause notice and contended that the units may be situated at different places but are under the common management and the Cenvat Credit has rightly been claimed. The assessee also submitted the details of credit of service tax availed on input tax services availed of by it from time to time. The assessee reiterated that it is having three units (i) at Jaipur, (ii) Niwai and (iii) Manesar and that all the three units are owned by the company working in the name of style of .....

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Industries Ltd. and further in the capacity of unit located at head Office the assessee placed order for purchase of inputs services that may be utilized commonly by all the three units for business of manufacture of the homogeneous final product i.e. Bearing falling under Chapter 84 of First Schedule to the Central Excixe Tariff Act, 1985 and Service Tax paid on those input services availed as Cenvat Credit was certainly to be utilized for payment of duty leviable on goods manufactured at unit .....

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may be a big unit while the other units of the company situated at Niwai and Manesar are very small units. It was also contended that the break up of the turnover of the three units in respect of the production/sale of final products in the relevant period was also provided namely; Jaipur unit 85.86%, Newai unit 13.83% and Manesar unit 00.31%. It was also submitted that admittedly the consolidated balance sheet, profit & loss account, trading account etc is being prepared from year to year. .....

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and that specified input service would become eligible for grant only when used in respect of manufacture of final product and accordingly held that Cenvat Credit is inadmissible for all these years and also charged interest and levied penalty as well. 5. The assessee preferred appeal before the Tribunal and the Tribunal vide order impugned came to the conclusion that the assessee has been able to prove that all the three units being one, there being common management, the assessee cannot be den .....

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management but the Commissioner, while analyzing the facts and material on record had rightly come to the conclusion that there are three different units and all were independent and there was no nexus at all in between three units and merely for the name sake, the other units were functioning. He contended that even as per the assessee 85.86% was the total turnover of the unit at Jaipur which clearly speaks that the other units were only for the name sake. He thus contended that substantial que .....

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l relied upon the judgment of CESTAT in the case of Doshion Ltd. Vs. CCE Ahmedabad (supra), the High Court of Gujarat at Ahmedabad dismissed the appeal of the Revenue in the case of Commissioner of Central Excise Vs. Dashion Ltd. (Tax Appeal No.415 of 2013 & 662 of 20014) vide judgment dt. 08/01/2016 and the question in the present set of appeals and in the case of Dashion Ltd. (supra) is exactly the same. 8. It may be noticed that the term input service distributer has been defined u/R. 2(m .....

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e distributer. At the relevant time, this Rule 7 permitted input service distributor to distribute Cenvat Credit in respect of service tax paid on the input service to its manufacturing units or units providing output service, subject to the two conditions, viz:- (a) the credit distributed against a document referred to in rule 9 does not exceed the amount of service tax paid thereon; (b)credit of service tax attributable to service [used by one or more units] exclusively engaged in manufacture .....

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