Tribunal denies CENVAT credit for services at non-registered units. Pre-deposit required. Recovery stayed.

The Tribunal ruled in favor of the Revenue, denying the appellant's claim for CENVAT credit distribution or service tax credit on input services utilized at units without manufacturing activity or registration for credit distribution. The appellant was directed to make a pre-deposit of Rs. 1.12 lakhs within four weeks, with the balance amount waived upon compliance, and recovery stayed pending the appeal.

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Issues:
- Availment of CENVAT credit on input services at different units
- Admissibility of input service tax credit in units without manufacturing activity
- Entitlement for CENVAT credit distribution

Analysis:
1. The appellant, engaged in manufacturing goods falling under Chapter 76, availed CENVAT credit on inputs and capital goods at their factory, along with service tax credit on input services at various units. A show cause notice was issued proposing to deny service tax credit amounting to Rs. 2,24,508 on specific services for the period April 2006 to January 2009. The jurisdictional Assistant Commissioner confirmed the demand, imposed interest and penalty, which was upheld by the Commissioner (Appeals), leading to the appeal before the Tribunal.

2. The appellant's counsel argued that the Pirangut and Wai units are their own, with the former engaged in job work and the latter intended for manufacturing excisable goods in the future. They contended that since the services were utilized at these units, they were entitled to claim CENVAT credit or distribute service tax credit to their main unit. On the contrary, the Revenue's representative contended that credit is not admissible in units without manufacturing activity and registration for input service tax credit distribution.

3. Upon reviewing the submissions, it was noted that the input services were indeed provided at units where no manufacturing activity was taking place, unlike the unit where manufacturing activities and duty liability were discharged. As the appellant had not registered as an input service tax credit distributor, they were not entitled to distribute service tax credit for services availed outside the manufacturing unit. Consequently, the Tribunal directed the appellant to make a pre-deposit of Rs. 1.12 lakhs within four weeks, with the balance amount waived upon compliance, and recovery stayed during the appeal's pendency.

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