TMI Blog2020 (4) TMI 601X X X X Extracts X X X X X X X X Extracts X X X X ..... epots situated all over India; and also the credit availed on input services used in the manufacturing activity and distributed among all the three manufacturing unit including the Thane unit. In these circumstances, directing the Thane unit to reverse the proportionate credit attributable to trading activity of other two unit would be incorrect and cannot be sustained in law. Therefore, the appellant s Thane unit would be required to reverse the CENVAT Credit availed on common input services relatable to trading activity availed by them at their Thane unit on the invoices issued by their Head Office. To ascertain the quantum of CENVAT Credit availed at Thane unit and attributable to the trading activity, the matter is remanded to the ad ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g of exempted services i.e. trading activity. On adjudication, the demands were confirmed with interest and penalty imposed on the appellants. Hence, the present appeals. 3. At the outset learned Advocate Shri Prakash Shah for the appellants submits that the appellants are having three manufacturing units located at Thane, Hoshiarpur and Jaunpur. They are also having 27 depots across the country from where the manufactured goods are sold by the appellants. Also, the appellant had purchased duty paid goods from the open market and sell the same from these depots. It is his contention that credits of Service Tax paid on various services initially were taken at their Head Office, which is registered as an ISD. The credit is distributed amon ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e trading activity from these depots. It is also not in dispute that they availed credit on common input services, namely, security services, Chartered Accountant s services, clearing and forwarding services, business auxiliary services, banking and financial services etc. used in the manufacturing activities at their three factories and also trading of their purchased goods at various depots. The CENVAT Credit on these input services are taken at their Head Office, which is registered as an Input Service Distributor (ISD) and subsequently the credit is distributed among three manufacturing units in proportionate to their turnover. In the present case, the Department sought to recover 5/6% of the profit margin of the trading turnover from t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing activity of other two unit would be incorrect and cannot be sustained in law. Therefore, the appellant s Thane unit would be required to reverse the CENVAT Credit availed on common input services relatable to trading activity availed by them at their Thane unit on the invoices issued by their Head Office. Thus, to ascertain the quantum of CENVAT Credit availed at Thane unit and attributable to the trading activity, the matter is remanded to the adjudicating authority. Since the issue relates to interpretation of law, therefore, we do not find merit in sustaining penalty. Consequently, no penalty is imposable on the appellants. 6. The appeals are disposed of in the above terms. (Dictated and pronounced in open court) - - TaxTMI ..... X X X X Extracts X X X X X X X X Extracts X X X X
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