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M/s Sterling Generators Pvt. Ltd. Versus Commissioners of Central Excise, Customs and Service Tax (Appeals)

2016 (12) TMI 529 - CESTAT AHMEDABAD

CENVAT credit - input services - security service - general insurance service - consultancy engineering services - input services received at EOU unit - whether the the input services viz. security service, general insurance service, consultancy engineering services received at their Silvasa EOU unit, having no nexus with manufacturing activity at the said unit, therefore, not eligible to CENVAT Credit being fall outside the scope of definition of input service prescribed at Rule 2(l) of CENVAT .....

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he Appellant that as per the existing provisions during the relevant period, 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. [2011 (2) TMI 1130 - KARNATAKA HIGH COURT]. In the said case, the Hon'ble High Court was confronted with the question whether the invoices issued by t .....

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umulate them at its head office and distribute the said credit to its various units. Merely because the input service tax is paid at a particular unit and the benefit is sought to be availed at another unit, the same is not prohibited under law. - I find that the present circumstances are more or less similar to the facts of the ECOF Industries Pvt. Ltd's case. In these circumstances, I do not see any reason not to follow the aforesaid judgment of Hon'ble Karnataka High Court in ECOF Industr .....

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als) -VAPI. 2. Briefly stated the facts of the case are that the Appellants are engaged in the manufacture of Diesel Generating Sets falling under Chapter 84 of Central Excise Tariff Act, 1985. They had availed CENVAT Credit, amounting to ₹ 14,56,225/- during the month of October 2008, on the basis of invoices issued by their head office registered as input service distributor. Alleging that the input services viz. security service, general insurance service, consultancy engineering servic .....

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ppellants 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 their head office, which was registered as an input service distributor under the relevant provisions of Service Tax Rules, 1994. It is his contention that during the relevant time, it was not a condition precedent to avail credit on the bas .....

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#39;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 in as much as in the relevant ER-1 monthly return, the Appellant had informed about availing of such credit to the Department and no facts had been suppressed from the knowledge of the Department. Therefore, the demand notice issued in 18.1.2011 for recovery of the credit availed in October 2008 is clearly barred by lim .....

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ot 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 basis of invoices issued under Rule 4A of Service Tax Rules, 1994 by their head office registered as an input service distributor, availed CENVAT Credit at their manufacturing unit. It is also not in di .....

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e 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 in respect of the services received at one unit, in favour of other unit, would be eligible to CENVAT Credit. Their Lordships, after interpretation of scope of input service and input service distributor , observed as follows:- 8. It is in this context, the definition of input service distributor makes it clea .....

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llan 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 than one unit he should also get 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 credi .....

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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 limitations are put for the distribution of credit by an input service distributor. Firstly, it cannot exceed the amount of service tax paid and secondly, the credit of service tax attributable to service used shall not be distribu .....

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