Appellant wins appeal for Cenvat Credit on service tax paid by multiple providers

The Tribunal allowed the appeal in favor of the appellant regarding the eligibility to avail Cenvat Credit on service tax paid by various service providers. The Tribunal found that the appellant's units were under the same entity, manufacturing excisable goods, and that there was no statutory requirement for proportionate distribution of service tax credit during the relevant period. The decision was supported by precedents such as Greaves Cotton Ltd. and Aurobindo Pharma Ltd., leading to the setting aside of the impugned order.

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Issues involved: Eligibility to avail Cenvat Credit on service tax paid by various service providers.

Detailed Analysis:

Issue 1: Eligibility to avail Cenvat Credit
The case revolves around the eligibility of availing Cenvat Credit on service tax paid by different service providers. The dispute specifically concerns the service tax credit availed by the appellant's unit at Saki-Powai road, Chandivali, for advertising services rendered to both Saki-Powai road, Chandivali, and Bradma division, Thane unit. The revenue argues that the appellant should not have availed the credit at Saki-Powai road, Chandivali, and should have distributed the services via Input Service Distributor, making the credit for service tax paid for goods manufactured at Thane unit ineligible for availing. The period under consideration is March 2005 to March 2009.

Issue 2: Legal Arguments
The appellant's counsel relies on decisions of various cases, including Greaves Cotton Ltd., Aurobindo Pharma Ltd., CCE vs. Ecof Industries Pvt. Ltd., and CCE vs. Doshion Ltd., to support the contention that there was no restriction for utilizing Cenvat Credit for proportionate allocation during the relevant period. The counsel argues that the absence of Input Service Distributor distribution can be seen as a procedural irregularity due to the lack of a statutory mandate for proportionate distribution until 01.04.2012.

Issue 3: Department's Position
On the contrary, the Departmental Representative asserts that Rule 2(l) of CENVAT Credit Rules, 2004 clearly prohibits availing Cenvat Credit for service tax paid on services rendered for another manufacturing unit. Each factory, as per the representative, is independently registered and must be considered separately for Cenvat Credit availing. The representative cites the case of Bhilosa Industries Pvt. Ltd. and the judgment of Bombay High Court in Ultra Tech Cement Ltd. to support this argument.

Issue 4: Tribunal's Decision
Upon reviewing the records, the Tribunal notes that the appellant's units in Thane and Chandivali are under the same entity, sharing a common balance sheet, and both manufacture excisable goods. The Tribunal observes that the issue primarily concerns the Cenvat Credit availed on service tax paid for advertising charges. It is acknowledged that the judgments of Greaves Cotton Ltd. and Aurobindo Pharma Ltd. address a similar issue, supporting the appellant's position.

Conclusion
After considering the arguments and precedents, the Tribunal sets aside the impugned order, allowing the appeal in favor of the appellant. The Tribunal emphasizes that the relevant judgments support the appellant's entitlement to avail Cenvat Credit at one unit, especially during the period when there was no statutory requirement for proportionate distribution of service tax credit.

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