TMI Blog2015 (3) TMI 1186X X X X Extracts X X X X X X X X Extracts X X X X ..... . For the Respondent: Ms Indira Sisupal, AC (AR) Per: D N Panda: The only dispute raised by Revenue in the present appeal is that the impugned credit not being earned by the appellant that ought not be allowed to it. Appellant submits that there is no prohibition of credit genuinely earned by one unit to be availed by another unit of same company. Following the decision of the Hon'ble High Court of Karnataka in the case of Commissioner of Central Excise, Bangalore-I Vs ECOF Industries Pvt. Ltd. reported in 2011 (23) S.T.R. 337 (Kar.), it is further submitted that transfer of credit by ISD from one unit to another is genuine. Therefore, there cannot be denial of credit on the ground that the input services were not used to provi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and input service provider read with Rule 3(1) and Rule 7(1) of the Rules makes it very clear that it is not the requirement of law, that the unit, which has paid the tax alone, is entitled to the benefit of the credit under the scheme. If a manufacturer has several units and has paid input tax, he is expected to register himself as a input service distributor, collect all these taxes paid and thereafter distribute the same to its various units except to two conditions which are mentioned in Rule 7. Therefore, he submits that there is no reason for interfering with the order passed by the tribunal, which is strictly in accordance with law. 5. In the light of the aforesaid facts and rival contentions, the question that arises for conside ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ther directly or indirectly, in or in relation to the manufacture of final products and clearance of final products from the place of removal, and includes services used in relation to setting up, modernization, renovation or repairs of a factory, premises of provider of output service or an office relating to such factory or premises, advertisement or sales promotion, market research storage upto the place of removal procurement of inputs, activities relating to business, such as accounting, auditing, financing, recruitment and quality control, coaching and training, computer networking, credit rating, share registry, and security, inward transportation of inputs or capital goods and outward transportation upto the place of removal; 2(m ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... registered himself as a service provider and then, he would be able to collect all the input service tax paid in all its units and accumulate them at its head office and distribute the said credit to its various units. At the time of distribution, the manner of distribution is provided in Rule 7 which reads 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 conditions, namely :- (a) the credit distributed against a document referred to in rule 9 does not exceed the amount of service tax paid thereon ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... input service distributor is required (under Section 69 of the Act, read with Notification No. 26/2005-S.T.) to take a separate registration. 10. Therefore, these are the only two limitations, which are imposed in Rule 7 preventing the manufacturer from utilizing the CENVAT credit, otherwise, he is entitled to the said credit. Merely because the input service tax is paid at a particular unit and the benefit it sought to be availed at another unit, the same is not prohibited under law. It is in this context, the manufacturer is expected to register himself as a input service distributor and thereafter, he is entitled to distribution of credit of such input in the manner prescribed under law. Therefore, the order passed by the tribunal is ..... X X X X Extracts X X X X X X X X Extracts X X X X
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