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TMI Blog2024 (6) TMI 614X X X X Extracts X X X X X X X X Extracts X X X X ..... wherein the Ld. Commissioner has denied the Cenvat Credit amounting to Rs. 1,21,48,714/- (including Cess), demanded interest and imposed penalty equivalent to the credit denied under section 11AC of the Central Excise Act, 1944 read with Rule 15(3) of the CENVAT Credit Rules, 2004. 2. The issue involved in this appeal is denial of the credit availed at the factory of the appellant, ie, the manufacturing unit of Berger Paints India Limited situated at Howrah. The credit has been distributed to the manufacturing unit by the Administrative Office of the appellant situated at GIDC Estate, Vithal Udyognagar (V.V. Nagar) Gujarat. In the impugned order, the Cenvat credit has been denied on the ground that the appellant (Howrah unit) has never di ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ) Commissioner Of C. Ex., Bangalore-I Versus Ecof Industries Pvt. Ltd. [2012 (277) E.L.T. 317 (Kar.)] (ii) Nestle India Ltd. Versus Commissioner of Cus. & C. Ex., Goa [2017 (5) G.S.T.L. 294 (Tri. - Mumbai)] (iii) Commr. of C. Ex., Jaipur vs National Engineering Industries Ltd [2016 (42) S.T.R. 945 (Raj.) 3.2. The appellant also submits that Central Board of Excise and Customs has issued Circular No. 1063/2/2018-CX dated 16.02.2018 wherein various decisions of Hon'ble High Courts have been accepted with an objective to reduce litigation and dispose of the cases on similar questions of law or identical case on facts pending with the department. In the said circular, the Board has accepted the decision of Commr. of C. Ex., Jaipur vs N ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e has no direct or indirect relation with final product manufacture and cleared by the appellant. We observe that the disputed Cenvat credit in this case has been availed by the appellant during the period March 2005 to March 2009. During the relevant period, the distribution of Cenvat credit on Pro-Rata basis was not there in the Cenvat Credit Rules. For the sake of ready reference, the Rule 7 of the Cenvat Credit rules that existed prior to issue of Notification 18/2012 CE(NT) and after issue of the Notification are reproduced below: "The input service distributor may distribute the CENVAT credit in respect of the service tax paid on the input service to its manufacturing units or units providing output service, subject to the following ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... emises of a manufacturer including the factory, whether registered or otherwise. Explanation 2.- For the purposes of this rule, the total turnover shall be determined in the same manner as determined under rule 5." 6.1. A conjoint reading of Rule 7 existed prior to issue of Notification 18/2012 CE(NT) and after issue of the notification would clearly reveal that there was no condition in force to distribute the Cenvat based on usage of input service or turnover. The restrictions for proportionate distribution was introduced subsequently vide Notification No. 18/2012-C.E. (N.T.). Thus, we observe that during the relevant period there was no requirement of establishing one-to-one correlation. Accordingly, we hold that the denial of Cenvat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sed in the factory of the appellant but it is related To the product Nescafe and Maggie Noodles which are manufactured in the appellant company's different factory. As regards the provision for distribution of the credit, there is no condition of one-to-one correlation between the credit distributed and the quantum of service received and used by a particular factory. Though the service is related to the product which is manufactured in the appellant's company in other factories. But all the factories belonging to one company and in the absence of any provision of one-to-one correlation the credit can be distributed to any factory of one company. This issue has been considered by the Hon'ble Karnataka High Court in the case of Ecof Industri ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fore would not survive in view of no previous restriction of this nature flowing from Rule 7 of the Rules of 2004. The respondent has been able to prove that all the three units are one and the same, have common management and the Revenue has not been able to disprove this fact." 6.5. We also find that Central Board of Excise and Customs has issued Circular No. 1063/2/2018-CX dated 16.02.2018 wherein various decisions of Hon'ble High Courts have been accepted with an objective to reduce litigation. In the said circular, the Board has accepted the decision of Commr. of C. Ex., Jaipur vs National Engineering Industries Ltd [2016 (42) S.T.R. 945 (Rajasthan) cited above . The Circular dated 16th February 2018 issued by CBEC accepting the d ..... X X X X Extracts X X X X X X X X Extracts X X X X
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