TMI Blog2021 (7) TMI 296X X X X Extracts X X X X X X X X Extracts X X X X ..... d. vs. Commissioner of Central Excise Customs, Belapur [ 2014 (2) TMI 297 - CESTAT MUMBAI ] and also noticed that a Division Bench of the Tribunal in Colgate Palmolive (I) Ltd. vs. Commissioner of Central Excise, Mumbai-I [ 2011 (2) TMI 57 - CESTAT MUMBAI ] had taken a contrary view. The Division Bench, therefore, referred the questions for consideration by a Larger Bench of the Tribunal. The Larger Bench of the Tribunal in M/S. KRISHNA FOOD PRODUCTS, M/S. MARIAMMA R. IYER, M/S. PARLE BISCUITS PVT LTD. VERSUS THE ADDITIONAL COMMISSIONER OF CGST C. EX [ 2021 (5) TMI 906 - CESTAT NEW DELHI ] has held that Parle was justified in distributing credits on input services attributable to the final product on a pro-rata basis proportionate t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of 2019. 3. Krishna Food claims that it was authorised by Parle Biscuits to manufacture, on its behalf, biscuits and to comply on its behalf all the procedural formalities contemplated under the Central Excise Act, 1944 [Excise Act] and the Rules framed thereunder in respect of the goods manufactured on behalf of Parle Biscuits and also to furnish information relating to the price at which Parle Biscuits would sell the said biscuits in order to enable the determination of the value of the said goods under section 4A of the Excise Act. 4. The inputs used for manufacture of the biscuits are supplied by Parle Biscuits which pays for the inputs but Krishna Food takes credit of the same and utilises the credit for payment of duty on the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d) of the CENVAT Rules. 7. A show cause notice dated July 18, 2018 was, however, issued to Krishna Food and Parle Biscuits to show cause as to why the CENVAT credit of service tax distributed by Parle Biscuits to Krishna Food for the period from July 2013 as to May 2015 should not be denied. Krishna Food filed a reply. The Additional Commissioner, by order dated 08.02.2019, confirmed the demand and imposed penalty with interest upon Krishna Food. Penalty was also imposed upon Parle Biscuits and Iyer. The appeals filed to assail the said order of the Additional Commissioner were dismissed by the Commissioner (Appeals), by order dated 28.06.2019. 8. The issue involved in all these appeals is whether Parle Biscuits was justified in distr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 25.05.2021 answered the reference in the following manner: 44. The answer to the first issue referred to by the Division Bench would, therefore, be that Parle was justified in distributing credits on input services attributable to the final product on a pro-rata basis proportionate to the turnover of each unit between the manufacturing plants of Parle and its contract manufacturing units, including the appellant (Krishna Food), under rule 7(d) of the CENVAT Rules. 45. In view of the answer to the first issue in favor of the appellant, it would not be necessary to answer the second issue referred by the Division Bench. This issue is whether the appellant (Krishna Food) would, irrespective of the answer to the first issue, be entitled t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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