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of <h1>Tribunal rules in favor of Lupin Ltd, Tarapur, allowing CENVAT credit.</h1> <h3>Lupin Limited, KR Gupta, Vijaykumar Kothiwale and Suresh Gargav Versus Commissioner of Central Excise, Thane –II</h3> Lupin Limited, KR Gupta, Vijaykumar Kothiwale and Suresh Gargav Versus Commissioner of Central Excise, Thane –II - TMI Issues:Challenge against disallowance of CENVAT credit by Commissioner of Central Excise, Thane - II for not being received and utilized, confirmed tax liability, interest, and penalties. Appeal against impugned order by M/s. Lupin Ltd, Tarapur and individuals. Interpretation of CENVAT Credit Rules, 2004 and section 11AC of Central Excise Act, 1944. Justification for distribution of credit to appellant's unit. Allegations of non-fulfillment of conditions for credit distribution. Legal validity of penalties imposed.Analysis:The case involves M/s. Lupin Ltd, Tarapur challenging the disallowance of CENVAT credit by the Commissioner of Central Excise, Thane - II. The impugned order disallowed credit of &8377; 69,83,550/- for not being received and utilized by the appellant, confirming tax liability, interest, and penalties under relevant sections. The Commissioner held that the credit distribution lacked rationale and input services were not used directly or indirectly in output manufacture. The responsibility to justify credit assignment was emphasized, especially for invoices predating September 10, 2004.The appellant argued that as an 'input service distributor,' credit distribution was permissible under Rule 7 of CENVAT Credit Rules, 2004 pre-April 1, 2012. They contested the invocation of section 11AC without proper notice reference and questioned the penalties imposed. The Authorized Representative countered, stating that the input services were not relevant to output production.The Tribunal examined the case, noting that the head office was registered as an 'input service distributor' entitled to credit distribution. The objection to the proportion allocated to the Tarapur unit lacked basis in the show cause notice, indicating procedural irregularities in the adjudication.Referring to legal precedents like Castrol India Ltd and Doshion Ltd, the Tribunal emphasized Rule 7 of CENVAT Credit Rules, 2004, highlighting the conditions for credit distribution. The Tribunal found merit in the appellant's arguments, emphasizing the absence of allegations on non-fulfillment of conditions in the show cause notice, rendering the denial of service tax invalid. The Tribunal also cited Praj Industries Ltd and a High Court ruling, reiterating the limited restrictions on credit distribution under Rule 7.Ultimately, the Tribunal set aside the impugned order, allowing the appeals based on the legal analysis and precedents cited, emphasizing the legality of credit distribution and lack of legal infirmity in the appellants' actions.Conclusion:The judgment favored M/s. Lupin Ltd, Tarapur and the individuals appealing against the disallowance of CENVAT credit, tax liability, interest, and penalties. The Tribunal's decision rested on the legal validity of credit distribution under Rule 7 of CENVAT Credit Rules, 2004, emphasizing compliance with conditions and procedural regularities. The ruling highlighted the importance of proper notice, adherence to legal provisions, and limited restrictions on credit distribution, ultimately allowing the appeals.
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