TMI Blog2019 (4) TMI 430X X X X Extracts X X X X X X X X Extracts X X X X ..... ich will be indirectly relatable to the manufacture or which will not be directly relatable to the manufacture of final products in the field units. If the head office commits an error or plays mischief and wrongly distributes credit either by availing ineligible credit itself or by improperly distributing it can the recipient of the ISD invoices be able to correct the mistake? - Held that:- In my considered view, they will not be able to do so. They will also not be able to explain why the credit was wrongly taken or distributed by their head office - Even if this argument is accepted, no malafide such as fraud, collusion, wilful misstatement or suppression of facts can be attributed to the field office. Once they have accepted the ISD invoices issued by their head office in good faith. Extended period of limitation cannot be invoked and the entire demand is time barred in this case. Appeal allowed - decided in favor of appellant. - Appeal No. E/31012/2018 - A/30449/2019 - Dated:- 1-4-2019 - Mr. P. VENKATA SUBBA RAO, MEMBER (TECHNICAL) Shri Y. Sreenivasa Reddy, Advocate for the Appellant. Shri V.R. Pavan Kumar, Superintendent/AR for the Respondent. ORDER ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... see under Rule 15(2) of CCR, 2004 read with Sec.11AC. He also gave the appellant the option of paying reduced penalty equal to 25% of the confirmed amount subject to fulfilment of conditions prescribed under Sec.11AC(1)(c) of Central Excise Act, 1944. 3. Aggrieved, the appellant appealed to the first appellate authority who reduced the penalty to ₹ 18,99,858/- but otherwise upheld the order of the lower authority. Hence, this appeal. 4. Learned counsel for the appellant takes the bench through the records of the case and submits that the credit in question was taken on ISD invoices issued by their Head office as can be seen from Para 12 of the show cause notice itself. The appellant was merely recipient of ISD invoices from the Head office and they were not the ones who took credit on the input services themselves. In other words, they were transferred this credit by their Head office through ISD invoices. Therefore, if the credit, if any, was wrongly availed, it was by their Head office who themselves are registered with service tax department as input service distributors. Therefore the Head office should have been put to notice and not the recipient of the ISD invoic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ey had not submitted the documentary evidence. In fact, the entire demand in the show cause notice is based on the ER-1 returns filed by them and their letter dated 07.12.2014 and 09.12.2014 along with disputed ISD invoices. Therefore, the first appellate authority has erred in holding that they had not submitted the documentary evidence in respect of the remaining credit. He pleads that the impugned order may be set aside with consequential relief. 6. Learned departmental representative reiterates the findings of the lower authority and would submit that CENVAT credit can be taken not on any invoices but only if they are input/input services in terms of Rule 2(l) of CCR, 2004. With respect to manufacturers, an input service means any service used by a manufacturer whether directly or indirectly in or in relation to the manufacture of final products and clearance of final products up to the place of removal and goods and services used in relation to modernisation, 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 up to the place of removal, procu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed to the manufacture. Rule 2(l) of CCR, 2004 expanded this definition for the purpose of CENVAT credit with expression in or in relation to manufacture . Thus, many activities which are not normally considered as manufacture will also get covered in the definition of manufacture as per Central Excise Act, 1944 if such activities are not incidental or ancillary to manufacture. Even if they are not incidental or ancillary to manufacture they may still get covered as in relation to manufacture . Rule 2(l) of CCR, 2004, further enlarges this definition by including services used in relation to modernization, renovation or repairs of a factory, recruitment, quality control, accounting, market research, sales promotion, advertisements, etc., which in the normal course would not fall in definition of manufacture. In other words, the definition of input service for the purpose of manufacture is very wide. Obviously, several activities such as sales promotion, marketing, legal services, accounting etc., may not be handled in the factory but in the head office of the company. In such a case, the invoices will be received in the head office. Where the head office has more than one unit, pr ..... X X X X Extracts X X X X X X X X Extracts X X X X
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