TMI Blog2018 (4) TMI 670X X X X Extracts X X X X X X X X Extracts X X X X ..... ution of credit which is not the issue in the present case. This Bench in the previous proceedings against the Appellant in Mahindra & Mahindra Ltd. Versus Comm. of Service tax, Mumbai [2017 (7) TMI 167 - CESTAT MUMBAI] has already held that Rule 14 of CCR can be made applicable only on the person who avails the Cenvat credit wrongly or utilizes the credit,it is not invokable against the Input Service Distributors. Demand set aside - appeal allowed - decided in favor of appellant. - ST/90053/14 ST/CO-91010/15 - A/85817/2018 - Dated:- 21-3-2018 - SHRI RAMESH NAIR, MEMBER (JUDICIAL) AND SHRI RAJU, MEMBER (TECHNICAL) Appearance Shri Rajesh Ostwal, Advocate for Appellant Shri Rishi Goyal, Addl. Commr. (A.R) for responde ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Rule 14 of CC Rules would apply. That Rule 7 casts responsibility and determines the manner of distribution of the credit so taken for distribution. That the statutory provisions cannot be interpreted to allow benefit of the inadmissible credits to the class of persons who are functioning as an ISD vis a vis the class of persons who are not functioning as an ISD. 4. We have gone through the facts of the case, considered the submission made by both the sides and perused the records. We find that the Input Service Distributor registration is only for the purpose of distribution of credit. He can be held accountable only in case of improper distribution of credit which is not the issue in the present case. This Bench in the previous pr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... On a plain reading of the above rule, it is seen that the recovery of cenvat credit can only be made when the cenvat credit has been taken or utilised wrongly. 6. In the present case, the input service distributors have not taken any credit whereas they have already distributed the input service credit. The credit was taken by various manufacturing units. Therefore, rule 14 can be made applicable only on the person who avails the cenvat credit wrongly or utilised the same. Therefore the appellant being an input service distributor cannot be issued any show-cause notice. The Board also in the letter dated 10.03.2014 clarified the issue in hand. The board circular is reproduced below: In this context of a case before the CES ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ave been pointed out. If this had been done by the Chief Commissioners Mumbai, then the legal position regarding Rule 14 and the case law could have been pointed out to the Honourable Tribunal without making a reference to the Board. 5. Since the Chief Commissioners Mumbai I and Mumbai II have often indicated in various meetings that there was apparently a large revenue involvement on this issue, they are requested to indicate the number of SCN's (and amounts involved) issued to ISD's and more importantly, the circumstances under which SCN's were issued contrary to the provisions of Rule 14. 7. From the above clarification, it can be seen that the board has categorically clarified that no show-cause notice can be issu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed in the impugned order vis-a-vis the earlier order referred to. 3. For the aforesaid reasons and on a prima facie construction of the provisions of Rule 14 of the Cenvat Credit Rules, 2004, we are of the view that the impugned order is unsustainable. 4. Consequently, we set aside the impugned adjudication order and allow the appeal. We do so after waiving pre-deposit and hearing ld. Counsel, Ms. Tuhina Sinha for the appellant and Shri Govind Dixit, ld. DR for Revenue 8. As per our above discussion, we are of the considered view that the demand raised on the appellant being an input service distributor is not sustainable in law. Therefore, the impugned order is set aside. Appeals are allowed. Cross objections disposed of acc ..... X X X X Extracts X X X X X X X X Extracts X X X X
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