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2018 (4) TMI 670

war Unit which is manufacturing excisable goods which are exempted from duty in terms of N/N. 50/2003 - case of appellant is that Appellant is mere Input Service Distributor and has himself did not avail cenvat credit hence the recovery in terms of Rule 14 is not sustainable. - Held 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 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 per .....

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Vs. CCE, MUMBAI - II 2014 - TIOL - 1188 - CESTAT. 3. Shri Rishi Goyal, ld, Additional Commissioner (AR) appearing for the revenue submits that in terms of Rule 9 of CCR, 2004 the Input Service Distributor has to avail the cenvat credit and the distribute it. It also casts responsibility on the ISD to file the returns of such availment and distribution of credit. That in case where the credit has been wrongly taken 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 pers .....

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credit has been taken and utilised wrongly or has been erroneously refunded, the same shall be recovered along with interest from the manufacturer or the provider of output service, as the case may be, and the provisions of sections 11A and 11AA of the Excise Act or sections 73 and 75 of the Finance Act, 1994, as the case may be, shall apply mutatis mutandis for effecting such recoveries." 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 .....

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hence could have been pointed out by the jurisdictional Commissionerates, without asking the CBEC to restate the provision in the Cenvat Credit Rules. 4. The Chief Commissioners have also pointed out varying case law on the subject. A detailed examination of these case laws has revealed that each one of them can be distinguished effectively and their inapplicability could also have 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 rev .....

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27-8-2012 on the ground that the demand for recovery of Cenvat credit cannot be raised against the Input Service Distributor under Rule 14 of the Cenvat Credit Rules, 2004; and where Cenvat credit is wrongly availed and utilized, the same should be recovered from the manufacturer or provider of output services. The wholly contrary conclusion and reasoning is adopted 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 .....

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