TMI Blog2021 (7) TMI 457X X X X Extracts X X X X X X X X Extracts X X X X ..... not disputed the eligibility or entitlement of credit then the failure of the appellant to distribute the same and transition to GST after coming into force of GST is only a procedural lapse and it will not affect the substantive right of the appellant because the failure to comply with the provisions of ISD are at best may be termed as procedural irregularity and it has been consistently held by various Courts that substantive right cannot be denied merely on procedural irregularity. Extended period of limitation - revenue neutrality - HELD THAT:- The extended period of limitation invoked by the Department is not sustainable in the present case because the appellant has not concealed any information from the Department and all the documents were provided by the appellant to the Audit Party and on the basis of Audit Report, the SCN was issued - Further the entire demand in the present case results into revenue neutral because even if the appellant had distributed the credit, it would have been available for utilization by appellant post GST regime in terms of Section 25 of the CGST Act, 2017. It is found that pre-requisite of revenue neutrality is that there is no extra ben ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a Pvt. Ltd. Year MPP B- 165 MPP B- 59 MPP B- 163 MPP C- 217 MPP-5A- BMS Ineligible credit pertaining to other units A B C D E F G=C+D+E+F 2014-15 834163 56342 56342 2015-16 1349873 105175 31926 40009 56530 233640 2016-17 13352582 82865 11696 37309 148378 280248 2017-18 408459 16694 3447 8802 21093 50036 TOTAL 3925077 204734 103412 86119 226002 6,2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ants (the head office), to which they are eligible on a pro-rata basis. The Assistant Commissioner after following the due process vide Order-in-Original dated 10.01.2019 confirmed the demand of CENVAT credit and interest and penalty mainly on the ground that the appellants ought to have distributed credits on common input services as per the provisions of Rule 7 of CENVAT Credit Rules, 2004 and instead have availed all the credits as the ISD. The original authority has also not accepted the contention of the appellant regarding revenue neutrality. Aggrieved by the order of the original authority, the appellant filed appeal before the Commissioner (Appeals) who vide the impugned order has rejected the appeal on the similar grounds. Aggrieved by the same, the appellant is before Tribunal. Hence, the present appeal. 3. Heard both the parties and perused the records of the case. 4. Learned Counsel for the appellants submitted that the impugned order is not sustainable in law as the same has been passed without properly appreciating the facts and the law regarding revenue neutrality as held by various Courts. She further submitted that after the implementation of GST with effec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Commissionerate v. Oerlikon Balzers Coating India P. Ltd. - 2019 (366) E.L.T. 624 (Bom.). Hindustan Zinc v. Commissioner of CGST, Udaipur reported in 2019 (4) TMI 475. Sri Krishna Pharmaceuticals Ltd. vs. CCE, Hyderabad, reported in 2015 (40) S.T.R. 1039 (Tri. - Bang.). 4.1. She further submitted that the appellant is eligible for credit of ₹ 1,22,145/- out of ₹ 6,04,338/- being the credit on common input services availed by all units which has been received from other services providers which is indicated in Table B cited supra. Learned Counsel further submitted that for the period up to 01.04.2016 i.e. for the period of April 2014 to March 2016, the appellants were not liable to distribute CENVAT credit pertaining to common input services used in more than one unit of the appellant company on pro-rata basis and the demand for the said period is liable to be set aside. She further submitted that the demand of CENVAT credit of ₹ 6,66,043/- for the period of April 2014 to March 2016 confirmed in the impugned order is without any authority of law and is liable to be set aside. She also submitted that Rule 7 of CCR, 2004 up till 31.03.2016 provided t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed the impugned order. 6. After considering the submissions of both the parties and perusal of the material on record, I find that in the present case, the learned Commissioner has confirmed the demand of CENVAT credit on the grounds that the appellant has failed to distribute the credit to its various units regarding common input service. The defence of the appellant that after the implementation of GST with effect from 01.07.2017, the appellants have taken single registration for all the 9 units working in the State of Karnataka in terms of Section 25 of the CGST Act, 2017. Further, I find that the unutilized credit from ER-1 Returns and ST-3 Returns were transferred to Form GST TRAN-1 in terms of Section 140 of the CGST Act 2017 read with Rule 117 of CGST Rules 2017 and the same was further taken to Electronic Credit Ledger. Further, I find that the net effect of not distributing the credit to various units and availed by the ISD will be NIL after coming into force of GST because the Department has not disputed its admissibility and eligibility. Further, I find that this issue of revenue neutrality has been considered by the various Courts and it has been held that non-distr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ra) wherein the Tribunal held that proportionate distribution of credit was not mandatory prior to amendment with effect from 01.04.2016 in Rule 7 of CENVAT Credit Rule, 2004 and quashed the proceedings on the ground of revenue neutrality. Further, I also find that once the Department has not disputed the eligibility or entitlement of credit then the failure of the appellant to distribute the same and transition to GST after coming into force of GST is only a procedural lapse and it will not affect the substantive right of the appellant because the failure to comply with the provisions of ISD are at best may be termed as procedural irregularity and it has been consistently held by various Courts that substantive right cannot be denied merely on procedural irregularity. Similarly, the extended period of limitation invoked by the Department is not sustainable in the present case because the appellant has not concealed any information from the Department and all the documents were provided by the appellant to the Audit Party and on the basis of Audit Report, the SCN was issued. Further the entire demand in the present case results into revenue neutral because even if the appellant had ..... 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