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2016 (11) TMI 477 - CESTAT AHMEDABAD

2016 (11) TMI 477 - CESTAT AHMEDABAD - TMI - CENVAT Credit - input service distributor - cross unit utilization - security service - general insurance service - consultancy engineering services - input services received at Sikkim unit, having no nexus with manufacturing at their Dadra unit, therefore, not eligible to CENVAT Credit being fall outside the scope of definition of input service prescribed at Rule 2(l) of CENVAT Credit Rules 2004 - Held that: - the Appellants on the basis of invoices .....

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o necessity that the input services be received and utilized in the factory of the manufacturer where CENVAT Credit was availed. - Reliance placed on the decision of the case of CCE Bangalore-I Vs ECOF Industries Pvt. Ltd 2011 [2011 (2) TMI 1130 - KARNATAKA HIGH COURT] where it was held that The law mandates that the manufacturer who wants to avail the benefit of this service tax if he has more than one unit he should also get registered himself as a service provider and then, he would be ab .....

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ial ) For the Appellant: Shri A. Chordiya, Advocate For the Respondent: Shri Alok Srivastava, A.R. ORDER Per Dr. D. M. Misra This is an appeal filed against OIA No.SRP/141/Vapi/2013-14, dt.05.06.2013, passed by Commissioner (Appeals), C.Ex. & S.Tax, Vapi. 2. Briefly stated the facts of the case are that the Appellants are engaged in the manufacture of P.P. Medicines falling under Chapter 30 of Central Excise Tariff Act, 1985. They had availed CENVAT Credit, amounting to ₹ 1,39,055/- du .....

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ow Cause cum demand notice was issued to them on 08.09.2011 for recovery of credit with proposal for imposition of penalty. On adjudication, the demand was confirmed and penalty of equal amount imposed. Aggrieved by the said order, the Appellants preferred an appeal before the learned Commissioner (Appeals), who in turn, rejected their appeal. Hence, the present appeal. 3. The learned Advocate for the Appellant submitted that they have availed CENVAT Credit on the basis of invoice issued by thei .....

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es issued by their head office in distributing the credit in accordance with Rule 7 of CENVAT Credit Rules, 2004, hence, the credit cannot be denied to them. In support, the learned Advocate placed reliance on the judgment of Hon'ble Karnataka High Court in the case of CCE Bangalore-I Vs ECOF Industries Pvt. Ltd 2011 (23) STR 337 (Kar). Further, he has submitted that the demand is barred by limitation inasmuch as in the relevant ER-1 monthly return, the Appellant had informed about availing .....

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the place of removal. In the present case, these services had been availed at Sikkim unit, which had no nexus with the manufacturing activity undertaken at Dadra unit. Accordingly, CENVAT Credit cannot be held admissible to the Appellant. The learned Authorized Representative placed reliance on the Stay Order of the Tribunal in the case of M/s Hindalco Industries Vs CCE Allahabad 2013 (292) ELT 416 (Tri-Del). 5. Heard both sides and perused the records. 6. Undisputedly, the Appellants on the ba .....

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iod, there was no necessity that the input services be received and utilized in the factory of the manufacturer where CENVAT Credit was availed. The Appellants have heavily placed reliance on the judgment of Hon'ble Karnataka High Court in the case of ECOF Industries Pvt. Ltd. In the said case, the Hon'ble High Court was confronted with the question whether the invoices issued by the head office at Chennai in respect of the services received at one unit, in favour of other unit, would be .....

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rer or producer of a final product or provider of output service which receives invoices issued under Rule 4A of the Service Tax Rules, 1994 towards purchases 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. Therefore, the law mandates that the manufacturer who wants to avail the benefit of this service tax if he has more .....

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T 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, or (b) credit of service tax attributable to service use in a unit exclusively engaged in manufacture of exempted goods or providing of exempted services shall not be distributed. Therefore, only two li .....

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aster Circular referred to by the ld. Advocate reads as under :- 2.3.- An Input service distributor is an office or establishment of a manufacturer of excisable goods or provider of taxable service. It receives tax paid invoices/bills of input services procured (on which Cenvat credits can be taken) and distributes such credits to its units providing taxable services or manufacturing excisable goods. The distribution of credit is subject to the conditions that - (a) the credit distributed agains .....

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